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Fri 11 Jun 2010 07:36 AM

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Qatar may spend $100bn on projects - FinMin

Gov't eyes spending $40bn in 4 years; agencies, state-owned firms to spend $60bn.

Qatar may spend $100bn on projects - FinMin
QATAR CAPITAL: Qatar issued $7bn in dollar-denominated bonds in November.(Getty Images)

Qatar may spend around $100bn within the next four years on different projects and it does not plan issuing more local bonds following a $2.8 billion offering, Finance Minister Youssef Kamal said on Thursday.

The world's top exporter of liquefied natural gas (LNG) has invested tens of billions of dollars into a massive expansion of its energy capacity, expected to be finished by the end of 2010.

Kamal said the Gulf country's government planned to spend more than $40 billion on various infrastructure projects, while another $60 billion would come from government agencies or the state-owned firms such as Qatar Petroleum.

"The main projects are roads, sewage, ... water treatment and infrastructure like ports and airports," he told reporters on the sidelines of a Turkish-Arab economic forum in Istanbul.

When asked about the total spending, Kamal said: "I meant only government agencies or subsidiaries like Qatar Petroleum Corporation, which is owned 100 percent by the government and they have another $60 billion to be spent."

He did not give further details.

The cash-rich Gulf state boosted its spending by 25 percent to 117.9 billion riyals ($32.41 billion) in its 2010/11 budget. It projected a surplus of 9.7 billion, helped by a rebound in oil prices.

Analysts polled by Reuters expected Qatar to reach a budget surplus of 10.0 percent of gross domestic product in its current fiscal year. The economy is seen outpacing its regional peers with a 16.1 percent growth this year.

Kamal also said Qatar did not plan offering more domestic bonds for the time being, after issuing 10 billion riyals in eight-year conventional and Islamic bonds to local banks this month, the Gulf's first domestic sovereign offering this year.

"This is the first shot," he told reporters. When asked whether more were planned, he said: "For the time being, no."

The local issues were aimed at helping the country launch a local debt market, provide a new vehicle to pool excess liquidity in the banking sector and diversify its funding away from dollars.

Until now, government debt issues have been predominantly US dollar-denominated.

Qatar issued $7bn in dollar-denominated bonds in November, the largest sovereign debt issuance in the Gulf last year, which attracted over $30 billion in bids.

The country is rated 'AA-' by Standard & Poor's and 'Aa2' by Moody's. (Reuters)

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