After receiving the necessary documents and project presentation, our team will try to review your request as soon as possible, and leading experts will offer the best options for project funding.
GCAM Investment Group offers financing for seaport projects in the European Union, UK, USA, Canada, Latin America, North Africa, as well as in the Middle East, India and East Asia.
We are ready to provide long-term construction loans, leasing instruments and advanced project financing schemes.
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The cost of commercial seaports is rising
Seaports are critical elements of global supply chains, linking maritime and land transport routes around the world.These facilities are always in the focus of business and government attention, so the requirements for the construction of commercial seaports are extremely high today. Adapting both to customer needs, transport challenges, and current economic trends, seaports and their infrastructure are constantly evolving. New technologies, equipment and services, and stringent safety and quality standards have made building a modern commercial port far more costly and complex than it was a few decades ago.
In addition, suitable and easily accessible seashore areas are becoming increasingly scarce, forcing engineering companies to look for increasingly sophisticated solutions to adapt available locations to customer needs.
The traditional tasks of a commercial seaport, as part of the global logistics chain, are the processing, storage and distribution of various types of cargo. Along with the development of a broad concept of logistics in transport (including the reduction of transport costs and the provision of related additional services), the increase in the cost of seaports is largely due to the transition from the producer market to the consumer market and growing requirements for the quality of services.
Intense global competition for the shipping market is transforming seaports into modern high-tech logistics centers with a wide range of tools and services, requiring ever greater investment in the construction, expansion and modernization of the relevant infrastructure.
One of the significant efficiency factors that turn seaports into large logistics centers is the rapid exchange of information between all participants in the logistics chain.
Today, the commercial seaport plays a strategic role as an information center where information on the movement of goods is collected, processed and transmitted. This ensures smooth international shipments, preventing incidents and delays and minimizing potential losses. Port authorities, companies, brokers, freight forwarders, carriers and ultimately end customers are interested in technical innovation and modernization of port infrastructure throughout its life cycle.
In addition to expensive dredging, construction of breakwaters / berths and development of the surrounding area, contractors are paying great attention to the digitalization of port infrastructure.
Along with the increased cost of equipment and labor costs, this creates a greater need for long-term financing.
The impressive construction costs of large offshore port projects that have been announced in recent years confirm this.
For example, Sorong Port in Indonesia cost $1.8 billion, new International Multi-Purpose Logistics and Port Center in Cambodia cost approximately $1.5 billion, Larnaca Port (Cyprus) cost about $1.4 billion, Ramayapatnam Seaport (India) cost about $1.4 billion, and Grand Faw Port Container Terminal (Iraq) required about $3 billion.
One of the world's largest projects, Port of El Hamdania in Algeria, which is funded by the PPP, is valued at a record $6 billion. Another major recent maritime project is the Seine Nord Europe Canal in France, worth more than 5 billion euros.
Investment decision on the construction of a seaport
The seaport today is a multifaceted investment project where the interests of business, society and the state intersect.Given the growing role of maritime transport in the global economy, investment decisions to build seaports are made after careful consideration of numerous external factors.
According to the generally accepted definition, a port is a piece of land with an adjacent water area, which is equipped for mooring ships, loading and unloading cargo, disembarking and embarking passengers, as well as repairing ships and maintaining them. From this definition follows a long list of infrastructure facilities that a modern seaport should contain. This list includes harbors, piers, ship repair docks, fuel storage facilities, various types of terminals, and more.
Evaluation of investment projects and making investment decisions for the construction, expansion and modernization of port infrastructure is based on various strategies based on a range of financial indicators, such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). The cost of building a seaport is a key factor in developing various investment scenarios.
Several key methods are used to develop investment recommendations for seaport projects:
• Cost-benefit analysis.
• Analysis of mutual influence of investment projects.
• Comprehensive assessment of financial costs, etc.
In practice, companies considering projects for the development of maritime infrastructure or the construction of seaports usually use a combination of several methods to obtain an optimal result.
The decision to finance a particular project largely depends on the current market situation and an assessment of the potential impact of the project on the company.
Planning for the construction of a new seaport is limited by the following local factors:
• Restriction of development due to urban development.
• Potential environmental damage from dredging, clearing of of large areas and construction.
• Restrictions imposed by the local tourism industry and the hotel business, which are often critical to the economy of coastal areas.
• Limited technical possibilities of combining several types of cargo terminals within one facility, which requires the removal of part of the port infrastructure beyond its boundaries.
• Insufficient development of railways and other transport infrastructure near the port construction site, which requires additional investment.
The choice of location and dealing with numerous geodetic, economic, administrative and environmental factors greatly affect the final cost of an investment project.
At the level of the national economy, numerous methods are used to estimate the increase in port traffic as a result of the construction of a seaport. Analysis of data from various sources allows us to assess with high accuracy how much investment in a seaport affects the traffic and efficiency of other modes of transport, thereby assessing the positive impact of a particular project on the economy.
Such studies are especially important in the context that most major port projects today are government-controlled, and many of them are funded through public-private partnerships.
Any investment in port infrastructure has a high risk, which explains the reluctance of private investors to invest big money in strategic projects.
Public-private partnerships partly address this problem by providing a critical inflow of affordable long-term financial resources. Comprehensive analysis is often used to evaluate the effectiveness of such projects, which is based on the ability of partners to effectively distribute risks, the rational distribution of contractual obligations within the project, as well as the technical feasibility of the project as a whole and its elements.
According to experts, the 10 most expensive maritime projects that began to be built around the world in 2022 cost about 17 billion dollars in total. The cost of seaports is growing, so companies planning such projects need affordable and reliable long-term financial instruments.
Our team offers a wide range of advanced financial instruments for the construction of commercial seaports, LNG terminals, pipelines and infrastructure facilities.
We focus on financial engineering and modeling, enabling our clients to maximize the tax benefits of each model.
We also suggest considering flexible loans, which can be a valuable element in your project's capital structure.
