Title: Covid-19’s Long-Term Impact on International Project Financing: A Shift Towards Resilience and Digital Transformation.


It's hard to believe we're already in the third quarter of 2023. Time seems to fly by quickly, and we're optimistic that the US and global economy are slowly improving despite the many uncertainties. The economy has been impacted by various factors, including inflation, increasing food prices, higher living costs, and remote work. The Covid-19 pandemic has significantly impacted the economy, affecting everything from the cost of doing business to everyday life.

Hakim Saya helps local and foreign companies obtain project financing with our few direct lenders and investors. Due to the pandemic, we have witnessed how it has affected the businesses we serve. While some companies did well, others faced challenges. In this article, we will share our insights on the long-term effects of Covid-19 on international project financing. We also observe a shift towards resilience and digital transformation in this industry.

The novel coronavirus pandemic (Covid-19) triggered an unprecedented disruption to the global economy. Its implications were felt far and wide, altering traditional business ways and causing significant shifts in international project financing. With shifting industry dynamics, the altering landscape of risk and reward, and a heightened focus on digital transformation and resilience, the world of international project financing is now markedly different.

Pandemic’s Immediate Impact on Project Financing

The initial impact of Covid-19 on international project financing was brutal. Many planned or ongoing projects faced sudden financial constraints and operational challenges, especially in the hospitality, travel, and non-essential retail sectors. For instance, the International Air Transport Association (IATA) estimated $314 billion for airlines in 2020, significantly affecting associated infrastructure projects at airports worldwide (IATA, 2020).

That was back in 2020. However, as was the case throughout 2022 and early 2023, despite the series of macroeconomic challenges such as labor markets, inflation, and global supply chains disrupted, the International Air Transport Association (IATA) predicted the global outlook for air transport is highly resilient but less robust (IATA, 2023). Not everything is as doom and gloom as reported in the mainstream media. The demand for air travel is expected to double by 2040, growing the annual average rate of 3.4%. For example, the world number #1 in 2023, Singapore Airlines (“SIA GROUP”), reported in their Annual Report FY2022/23 that SIA Group posts the highest Net profit in its 76-year history. That’s amazing!

Shift in Risk Assessment

Covid-19 also led to a substantial shift in risk assessment for project financing. Traditional risk factors such as economic viability, political stability, and regulatory environment were compounded by the uncertainties of the pandemic. Investors, lenders, and funders have become more cautious and are now seeking detailed pandemic contingency plans for future projects. This scenario is illustrated by the European Investments Bank’s revised criteria for project appraisal, which now includes pandemic-related risk assessment (EIB, 2021).

Digital Transformation in Project Financing

The pandemic acted as a catalyst for digital transformation in project financing. Financial technologies (fintech) solutions like blockchain, AI, and machine learning, which were being adopted slowly, became critical to conducting business during the pandemic. For example, HSBC used blockchain technology for a transactional process in a UAE-based project, which resulted in lower operational costs and increased efficiency during the lockdowns (HSBC, 2020). Certain lenders that we work with also have adopted payments in Cryptocurrency.

Resilience and Sustainability: The New Focus

The aftermath of the pandemic saw a significant emphasis on resilience and sustainability in international project financing. Financing decisions are increasingly guided by factors such as a project’s environmental impact, contribution to social equity, and overall sustainability. This trend is evident in the rise of Environmental, Social, and Governance (ESG) investing, with funds flowing into ESG assets tripling in 2023, according to a report by Morningstar.

The Rise of ESG Investing

Environmental, Social, and Governance (ESG) criteria have gained traction recently as key factors influencing investment decisions. In the aftermath of Covid-19, this trend is expected to accelerate as investors increasingly prioritize sustainable and socially responsible growth. In 2023 and beyond, we may see ESG criteria becoming a standard part of risk assessment in project financing.

Projects aligning with the United Nation’s Sustainable Development Goals or contributing to mitigating climate change could receive more attention and funding. For example, renewable energy projects, sustainable infrastructure development, and initiatives addressing social inequalities will likely gain traction.

​​​​​​​Digital Transformation Continues

The digital transformation that was hastened by the pandemic is likely to continue apace. Technologies like AI, machine learning, and blockchain will increasingly be used to manage risks, and blockchain will increasingly be used to manage risks, improve efficiency, and reduce costs in project financing.

Greater Focus on Resilience

The Covid-19 pandemic highlighted the importance of resilience in the face of unexpected shocks. Moving forward, there will likely be a greater emphasis on planning for potential crises, whether pandemics, natural disasters, or geopolitical events.

Projects will need to demonstrate not just economic viability but also resilience to potential future shocks. This could involve incorporating flexible design principles, developing comprehensive contingency plans, and setting aside more substantial emergency funds.

Shift in Sectoral Priorities

The sectors receiving project financing will likely continue to evolve in response to the changing global landscape. Industries that have demonstrated resilience during the pandemic, such as digital technology, healthcare, and renewable energy, may attract more financing.

At the same time, sectors that were heavily hit by the pandemic, like travel and hospitality, might face more scrutiny from investors. However, innovative projects in these sectors that demonstrate adaptability and resilience could still attract financing, especially with broader trends like digitalization and sustainability.

Geopolitical Considerations

Geopolitical factors will continue to play a crucial role in international project financing. Trade wars, political instability, and international regulations can all significantly impact the viability of a project. Investors must stay abreast of these factors and incorporate them into their risk assessment and decision-making processes.


A lot has happened since the pandemic started in 2020 and when international borders opened in 2022. We are progressing towards recovery, but nothing near where we used to be. Even though little progress has been made, and it considers a small win, it still deserves to be celebrated.

While the Covid-19 pandemic has undoubtedly posed formidable challenges to international project financing, it has also paved the way for innovation, resilience, and a reorientation towards more sustainable practices. The world of international project financing may have been permanently altered, but these changes signify progress toward a more efficient, resilient, and sustainable future.

We believe the world of international project financing will evolve in response to the Covid-19 pandemic. While the future is inherently uncertain, current trends suggest a shift towards more sustainable, resilient, and technology-driven practices. As we move beyond 2023, these trends will likely shape the nature of project financing, presenting new challenges and opportunities for investors and project managers alike.