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Kuwait is expected to award projects worth 3 billion Kuwaiti dinars ($9.9 billion) in 2022, according to a top official of the National Bank of Kuwait (NBK).
An NBK press statement quoted Deputy CEO Sulaiman Al-Marzouq saying that public finances improving on the back of high oil prices is expected to accelerate infrastructure project awards in the Gulf state.
"We have a gap in infrastructure projects, and in light of the improving public finances, we expect an acceleration in project awards to reach 3 billion Kuwaiti dinars in 2022," the press statement said, quoting Al-Marzouq's interview with The Banker International magazine.
The Deputy CEO said higher oil prices bode well for Kuwait's fiscal balance.
"The deficit has narrowed to 400 million dinars in 11 months, and we may even see a surplus by the end of the fiscal year (ending in March 2023). We expect this improvement to continue as life returns to normal, especially if oil prices continue to experience an upward trajectory," he observed.
Al-Marzouq admitted that Public-Private Partnerships (PPP) have stagnated over the past few years but expressed optimism that recent government directions and the resolution issued by the Minister of Finance to stop the renewal of state property contracts signed under the BOT (build-operate-transfer) system and transfer these contracts to the Kuwait Authority For Partnership Projects (KAPP) would further stimulate corporate lending growth.
"The private sector is playing an increasingly crucial role in project finance, furthering economic development to promote competition and enhance output efficiency, both of which are key pillars to achieving Kuwait's National Vision 2035. This also contributes significantly to increasing investment spending, which accounts for only 13 percent of total government spending in the 2022-2023 Budget," he said.
He added that "PPP projects should go through legislative review to accelerate project awards and ensure smooth sailing ahead once clear mechanisms are established to resolve any challenges."
(Writing by SA Kader; Editing by Anoop Menon)
