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Yemen Infrastructure Report Q2 2010

Yemen's elephant in the room this quarter was militant Umar Farouk Abdul Mutallab's attempted downing of a US-bound airplane and his links with al-Qaeda leaders near the Yemen's capital Sana'a. The impetus this gave to bilateral aid demonstrated the importance of international funds to Yemen's economy. Together with several big ticket transport and energy projects, this aid will see Yemen's infrastructure market return to modest growth in 2010 after an anaemic 2009. By 2014, BMI expects the sector to reach a total value of US$1.15bn. However, with the government estimating the country's funding requirements to be between US$30bn and US$50bn, it is clear that swollen deficits and tentative recovery in developed economies will put a wide gap between platitudes and financial commitments. The real significance of the unwelcome spotlight will be the impetus provided to Gulf governments' support of Yemen's infrastructure. After all it is Yemen's neighbours who potentially would be most threatened by a further deterioration in the economic and security situation. BMI expects the construction sector to expand by 2.74% in 2010 to US$810mn partly on the back of this assistance. Indeed, Abu Dhabi has committed as much as AED2.4bn to 14 projects in energy, water, transport, education and other infrastructure projects. Qatar followed suit with US$500mn to fund the Saleh Medical City among other projects. Construction spending will also be boosted by work beginning on up to US$2.3bn in major real estate developments over the next year. Some long-awaited noise was also made in Yemen's transport sector this quarter. Dubai-based property company Al-Noor announced that the historic US$20bn Yemen-Djibouti bridge project will see a Build Operate Transfer (BOT) contract for the road and rail link's first phase awarded in H110. The transport ministry also announced a US$3.5bn rail network within Yemen to be connected to the ongoing GCC rail project via Oman. Around 2,500km in freight and passenger lines will connect the Saudi border in the north to the port of Aden in the south, before stretching east to Oman. Meanwhile, Yemen's oil ministry has announced a US$2bn expansion at the Aden refinery, potentially with involvement from China's Sinopec, ramping up capacity to anywhere between 150,000 barrels per day (b/d) and 500,000 b/d, up from 70,000b/d-80,000b/d. BMI has reservations; however, on the achievability of what are colossal projects in scale and cost for Yemen. Systemic risks make project finance debt and equity investments hard to come. Meanwhile, political stability and security look as grim as ever, especially as militants may have been encouraged by the recently achieved notoriety. While increased project activity will see growth return to Yemen's infrastructure market, the confluence of these factors maintain the high risk of investing in the country. BMI expects year-on-year growth to be sluggish as a result, at 2-4% per year, and sees the sector break the US$1bn mark only by 2013.

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Yemen Infrastructure Report Q2 2010

  1. 1. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email!Yemen Infrastructure Report Q2 2010Published on March 2010 Report SummaryYemens elephant in the room this quarter was militant Umar Farouk Abdul Mutallabs attempted downing of a US-bound airplane andhis links with al-Qaeda leaders near the Yemens capital Sanaa. The impetus this gave to bilateral aid demonstrated the importanceof international funds to Yemens economy. Together with several big ticket transport and energy projects, this aid will see Yemensinfrastructure market return to modest growth in 2010 after an anaemic 2009. By 2014, BMI expects the sector to reach a total valueof US$1.15bn.However, with the government estimating the countrys funding requirements to be between US$30bn and US$50bn, it is clear thatswollen deficits and tentative recovery in developed economies will put a wide gap between platitudes and financial commitments.The real significance of the unwelcome spotlight will be the impetus provided to Gulf governments support of Yemens infrastructure.After all it is Yemens neighbours who potentially would be most threatened by a further deterioration in the economic and securitysituation. BMI expects the construction sector to expand by 2.74% in 2010 to US$810mn partly on the back of this assistance. Indeed,Abu Dhabi has committed as much as AED2.4bn to 14 projects in energy, water, transport, education and other infrastructureprojects. Qatar followed suit with US$500mn to fund the Saleh Medical City among other projects. Construction spending will also beboosted by work beginning on up to US$2.3bn in major real estate developments over the next year. Some long-awaited noise wasalso made in Yemens transport sector this quarter. Dubai-based property company Al-Noor announced that the historic US$20bnYemen-Djibouti bridge project will see a Build Operate Transfer (BOT) contract for the road and rail links first phase awarded inH110. The transport ministry also announced a US$3.5bn rail network within Yemen to be connected to the ongoing GCC rail projectvia Oman. Around 2,500km in freight and passenger lines will connect the Saudi border in the north to the port of Aden in the south,before stretching east to Oman.Meanwhile, Yemens oil ministry has announced a US$2bn expansion at the Aden refinery, potentially with involvement from ChinasSinopec, ramping up capacity to anywhere between 150,000 barrels per day (b/d) and 500,000 b/d, up from 70,000b/d-80,000b/d.BMI has reservations; however, on the achievability of what are colossal projects in scale and cost for Yemen. Systemic risks makeproject finance debt and equity investments hard to come. Meanwhile, political stability and security look as grim as ever, especiallyas militants may have been encouraged by the recently achieved notoriety. While increased project activity will see growth return toYemens infrastructure market, the confluence of these factors maintain the high risk of investing in the country. BMI expectsyear-on-year growth to be sluggish as a result, at 2-4% per year, and sees the sector break the US$1bn mark only by 2013. Table of ContentExecutive Summary ....5SWOT Analysis............6Yemen Infrastructure SWOT. 6Yemen Infrastructure Project Finance SWOT................... 6Yemen Economic SWOT ....... 7Yemen Political SWOT.......... 8Market Overview..........9Yemen .................. 9Industry Forecast Scenario .............12Table: Construction and Investment Data 12Yemen Infrastructure Report Q2 2010 Page 1/5
  2. 2. Find Industry reports, Company profilesReportLinker and Market StatisticsConstruction and Infrastructure Forecast Scenario............. 12Transport Infrastructure .................16Transport Infrastructure Overview................ 16Major Projects New and Ongoing Projects 19Airports......... 19Ports ............. 20Roads............ 22Railways ....... 24Major Projects Table Transport ............ 26Table: Major Infrastructure Projects Transport .......... 26Energy and Utilities Infrastructure .27Energy and Utilities Infrastructure Overview 27Major Projects New and Ongoing Projects 29Power Plants. 29Pipelines ....... 32Water ............ 32Major Projects Table Energy and Utilities .................. 34Table: Major Infrastructure Projects Energy & Utilties.................... 34Business Environment ...................35Yemen Business Environment .. 35Limits Of Potential Returns. 35Risk To Realisation Of Potential Returns.. 35Regional Overview................... 36Middle East Infrastructure Business Environment Ratings................... 36Table: Middle East Infrastructure Business Environment Ratings......... 39Project Finance Ratings .................40Yemen Project Finance Ratings ..................... 40Design and Construction .... 40Commissioning and Operating ................. 40Overall Project Finance Rating................ 40Regional Overview................... 41Project Finance Ratings: Outlook For Middle East........ 41Table: Design and Construction Rating.... 43Table: Commissioning and Operating Rating................. 44Table: Overall Project Finance Rating..... 46Macroeconomic Outlook .................47Table: Yemen - Economic Activity ............ 48Political Outlook........49Company Monitor......52Al-Rehab Engineering......... 52HAWK International ........... 53Global Overview ........55Global Infrastructure Forecasts Revisited 55Methodology..............59Industry Forecasts ................... 59Construction Industry ......... 59Data Methodology ................... 60Construction . 60Capital Investment .............. 61Construction Sector Employment.............. 61Yemen Infrastructure Report Q2 2010 Page 2/5
  3. 3. Find Industry reports, Company profilesReportLinker and Market StatisticsInfrastructure Business Environment Ratings 62Ratings Overview................ 62Table: Infrastructure Business Environment Indicators . 63Project Finance Ratings .......... 64Table: Design And Construction Phase .... 65Table: Commissioning And Operating Phase Commercial Construction ................. 66Table: Commissioning And Operating Phase Energy And Utilities .... 67Table: Commissioning And Operating Phase Transport.................... 68Sources ......... 69Yemen Infrastructure Report Q2 2010 Page 3/5
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  5. 5. Find Industry reports, Company profilesReportLinker and Market Statistics Payment Information Please indicate the payment method, you would like to use by selecting the appropriate box. Payment by credit card Card Number: ______________________________________________ Expiry Date __________ / _________ CVV Number _____________________ Card Type (ex: Visa, Amex…) _________________________________ Payment by wire transfer Crédit Mutuel RIB : 10278 07314 00020257701 89 BIC : CMCIFR2A IBAN : FR76 1027 8073 1400 0202 5770 189 Payment by check UBIQUICK SAS 16 rue Grenette – 69002 LYON, FRANCE Customer signature:   Please note that by ordering from Reportlinker you are agreeing to our Terms and Conditions at http://www.reportlinker.com/index/terms Please fax this form to: Europe, Middle East and Africa : + 33 4 37 37 15 56 Asia, Oceania and America : + 1 (805) 617 17 93Yemen Infrastructure Report Q2 2010 Page 5/5

Yemen's elephant in the room this quarter was militant Umar Farouk Abdul Mutallab's attempted downing of a US-bound airplane and his links with al-Qaeda leaders near the Yemen's capital Sana'a. The impetus this gave to bilateral aid demonstrated the importance of international funds to Yemen's economy. Together with several big ticket transport and energy projects, this aid will see Yemen's infrastructure market return to modest growth in 2010 after an anaemic 2009. By 2014, BMI expects the sector to reach a total value of US$1.15bn. However, with the government estimating the country's funding requirements to be between US$30bn and US$50bn, it is clear that swollen deficits and tentative recovery in developed economies will put a wide gap between platitudes and financial commitments. The real significance of the unwelcome spotlight will be the impetus provided to Gulf governments' support of Yemen's infrastructure. After all it is Yemen's neighbours who potentially would be most threatened by a further deterioration in the economic and security situation. BMI expects the construction sector to expand by 2.74% in 2010 to US$810mn partly on the back of this assistance. Indeed, Abu Dhabi has committed as much as AED2.4bn to 14 projects in energy, water, transport, education and other infrastructure projects. Qatar followed suit with US$500mn to fund the Saleh Medical City among other projects. Construction spending will also be boosted by work beginning on up to US$2.3bn in major real estate developments over the next year. Some long-awaited noise was also made in Yemen's transport sector this quarter. Dubai-based property company Al-Noor announced that the historic US$20bn Yemen-Djibouti bridge project will see a Build Operate Transfer (BOT) contract for the road and rail link's first phase awarded in H110. The transport ministry also announced a US$3.5bn rail network within Yemen to be connected to the ongoing GCC rail project via Oman. Around 2,500km in freight and passenger lines will connect the Saudi border in the north to the port of Aden in the south, before stretching east to Oman. Meanwhile, Yemen's oil ministry has announced a US$2bn expansion at the Aden refinery, potentially with involvement from China's Sinopec, ramping up capacity to anywhere between 150,000 barrels per day (b/d) and 500,000 b/d, up from 70,000b/d-80,000b/d. BMI has reservations; however, on the achievability of what are colossal projects in scale and cost for Yemen. Systemic risks make project finance debt and equity investments hard to come. Meanwhile, political stability and security look as grim as ever, especially as militants may have been encouraged by the recently achieved notoriety. While increased project activity will see growth return to Yemen's infrastructure market, the confluence of these factors maintain the high risk of investing in the country. BMI expects year-on-year growth to be sluggish as a result, at 2-4% per year, and sees the sector break the US$1bn mark only by 2013.

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