Project Finance Guide: How to Secure Funding for Your Own Project?

Attracting investors and convincing them to adopt and invest in a business idea is one of the most prominent challenges entrepreneurs face.

You might have an innovative idea and a solid business plan, but without successfully convincing investors and securing the proper funding, these dreams remain just ideas on paper. However, with an effective funding strategy, these ideas can be turned into a tangible reality, building successful and sustainable businesses.

We present a concise and comprehensive guide to everything you need to know about project finance and how to attract investors to achieve your desired funding goals.

But first, let us shed light on the startup landscape in the Middle East.

The State of the Startup Market in the Middle East in 2025

 The MENA venture investment landscape in H1 2024 presents a mixed yet optimistic picture with rising investor participation and sector-specific growth, particularly in E-commerce/Retail. The ongoing interest from regional and international investors underscores the potential for continued growth in the MENA venture capital ecosystem.

According to a recent report by MAGNiTT, the venture capital (VC) ecosystem in the Middle East raised $768 million across 154 deals during the first half of 2024.

Despite this being a 34% YoY decline in funding, the UAE and Saudi Arabia remained the most active in the field.

Saudi Arabia secured significant funding through two major deals in the e-commerce and modern retail sectors:

• SallaApp closed a substantial deal worth $130 million.

• Rewaa secured an investment round worth $75 million.

Additionally, the top-funded sector in H1 2024 was E-commerce/Retail, securing $244 million in total funding despite a 39% YoY drop.

Key Highlights from the Report

Increase in Investor Participation: The number of investors in MENA rose by 30% YoY to 262, indicating strong and sustained interest from both regional and international investors.

• Shift in Deal Dynamics: Excluding MEGA deals, non-MEGA funding in H1 2024 saw a 3% increase compared to H1 2023, driven by a 48% QoQ increase in non-MEGA deal funding in Q2 2024.

• Sector Trends:

  • E-commerce/Retail: Dominated by major deals like SallaApp’s $130M and Rewaa’s $75M investments.

  • FinTech: Leading in deal count but saw a decline in funding due to the absence of MEGA deals.

Noteworthy Insights

• Investor Growth: MENA saw a notable rise in investor participation, with a 30% YoY increase to 262 investors.

  • Regional Focus: 36% of investors were headquartered in KSA and UAE.

• Funding Distribution:

  • 45% of deals in the $1M-$5M range, indicating a preference for mid-sized investments.

  • Smaller deals under $1M accounted for 38%, while larger deals ($5M-$20M and $20M+) made up 14% and 3% respectively.

• Top Investors:

  • Sanabil Investments: $57.3M

  • Investcorp Bahrain: $55.7M

  • STV: $25.2M

  • Leading in deal count: 500 Global (16 deals), Antler (11 deals), and +VC (10 deals).

Comparative Analysis

• Non-MEGA Deal Funding Growth: MENA is the only region to report growth in non-MEGA deal funding in H1 2024, with a 3% increase compared to H1 2023.

• Global Trends: In contrast, SEA and Africa experienced significant declines in non-MEGA deal funding by 37% and 55% respectively.

Market ResilienceDespite the overall downturn, MENA’s venture capital landscape showed resilience with year-over-year growth in non-MEGA deal funding, driven primarily by the strong performance in Saudi Arabia and the UAE.

Now, let’s delve into the main topic of this guide.

What Is Project Finance?

Project finance is obtaining the necessary financial resources to start a new business venture or develop an existing project. These financial resources typically come from various sources and aim to enable project owners to achieve their business objectives.

The Key Project Finance Funding Sources and Options

In KSA and the UAE, you can secure funding for your business project from various sources, depending on its nature and size.Here are the primary sources through which you can obtain project finance:

Commercial Banks like large international banks, regional banks, and local banks like smaller banks with local expertise.

• Development Banks and Financial Institutions like the Social Development Bank in Saudi Arabia and the Emirates Development Bank (EDB) in the UAE.

• Institutional Investors like Sovereign Wealth Funds such as the Public Investment Fund (PIF) in Saudi Arabia.

• Private Equity firms invest in projects by providing capital in exchange for ownership stakes, and Venture Capital firms, which provide funding for high-risk, high-reward projects, particularly in innovative or emerging sectors.

• Corporate Investors like Strategic Investors are companies investing in projects aligned with their strategic interests, such as energy companies investing in new power plants—and Joint Ventures where companies pool resources and share risks and rewards.

• Government and Public Sector, such as Public-Private Partnerships (PPPs) and collaborative agreements between government entities and private sector companies to finance, build, and operate projects.

• Capital Markets such as Project Bonds and debt securities are issued to raise funds for specific projects. It also includes Securitization, which means converting project cash flows into securities sold to investors.

• International Organizations like the United Nations, NGOs like the European Union, and various UN agencies that fund projects aligned with their missions, such as environmental or social initiatives.

• Specialized Project Finance Companies with deep expertise in financing specific industries, offering tailored financial solutions for large-scale projects.

What Types of Projects Need Funding?

There are many types of projects that require funding to achieve their goals and execute their plans, including:

• Startups

Small companies in their early stages seek to offer new and innovative products or services. They need funding for research and development, marketing, and team expansion costs. Often found in sectors like technology, health, and agriculture.

• Small and Medium Enterprises (SMEs)

Companies operating on a relatively limited scale but significantly contributing to the local economy. These projects range from small shops and restaurants to service companies like beauty salons and travel agencies. They need funding to expand operations or improve services.

• Large Enterprises

Large industrial companies include car manufacturers, electronics factories, and power plants. These projects require significant funding to cover high production costs, research and development, and infrastructure expansion.

• Social Enterprises

Projects focused on achieving positive social impact alongside profits. They include initiatives in education, public health, and the environment. These projects need funding to implement their community programs and expand their influence.

• Real Estate Projects

Real estate development projects, such as building residential complexes, and investment projects, like purchasing and renovating properties for sale or rent, require substantial funding to cover construction or purchase and renovation costs.

These projects require funding for specific reasons: covering initial costs, expanding business operations, or developing new products and services.