Chinese banks are lending to Gulf energy giants, and analysts say the borrowers are choosing it

Why would a Gulf energy major borrow USD 3 bn from four Chinese banks? Because the price is right and a second set of lenders is worth having, analysts tell EnterpriseAM, and the borrowers’ balance sheets earn them narrow margins. The list of Gulf borrowers is growing: QatarEnergy has secured USD 3 bn from four Chinese banks, joining Aramco, Saudi Electricity Company, Acwa Power, and Adnoc, whose gas developments, electricity networks, and renewable projects now draw Chinese capital.

Strong balance sheets and state links make Gulf energy majors attractive borrowers. They can secure favorable financing terms, infrastructure finance expert Ajay Pratap S. Hari tells us, and borrowing doesn’t necessarily signal financial trouble. When debt is available at a narrow margin, retaining money can be more advantageous than financing every investment internally. Companies can preserve reserves for capital expenditure, existing commitments, and future disruptions without materially weakening their balance sheets, he adds.

Spreading funding across lenders keeps capital available if markets deteriorate. Even companies holding substantial reserves have reasons to use debt when they are financing large developments and managing unpredictable export revenues, Alicia García-Herrero, chief economist for Asia Pacific and the Middle East at Natixis, tells EnterpriseAM. QatarEnergy’s new facility is for general working capital, meaning day-to-day funding, while two Ras Laffan trains are offline and export revenues are uncertain. Companies such as QatarEnergy and Aramco can spread their funding requirements across internal resources and external lenders.

The lenders’ case

Chinese banks have cheap funding and fewer good borrowers at home. Monetary easing has given Chinese lenders relatively cheap funding, while weak domestic credit demand and prolonged difficulties in the property sector have reduced attractive lending prospects at home, Hari tells us. The Gulf offers creditworthy, often state-linked borrowers and substantial demand for financing across hydrocarbons, renewables, and digital infrastructure, which makes it an attractive destination even amid the conflict, he argues.

Gulf energy loans offer risk-adjusted returns and diversification: Gulf energy and infrastructure companies give Chinese institutions attractive risk-adjusted returns and a way to diversify their loan portfolios away from domestic property-sector pressures and exposure to US markets, García-Herrero adds. Chinese banks are therefore pursuing commercial returns alongside Beijing’s wider economic interests.

The largest Chinese state-owned banks can join multi-bn transactions at competitive margins. Pricing and lending capacity are the clearest advantages, Hari argues.

Two recent five-year Gulf loans were priced at 50 and 75 basis points above SOFR. QatarEnergy’s facility, from Bank of China, Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China, and China Construction Bank Asia, carries the 50, and QNB secured a separate USD 2.5 bn syndicated loan at the 75, with 25 international and regional institutions, including nine Asian banks that committed around USD 1.3 bn. The gap points to competitive pricing for QatarEnergy, although the two borrowers have different credit profiles and the loans aren’t directly comparable.

A look at the numbers: QatarEnergy’s five-year facility carries a margin of SOFR plus 50 basis points. Qatar National Bank (QNB), meanwhile, secured a separate five-year USD 2.5 bn syndicated loan at SOFR plus 75 basis points, Bloomberg reported. QNB’s financing brought together 25 international and regional institutions, including nine Asian banks that committed around USD 1.3 bn. The difference illustrates QatarEnergy’s competitive pricing, although the two borrowers have different credit profiles and the loans aren’t directly comparable.

Gas, power, solar

Four Chinese state-owned lenders supplied about USD 3.7 bn of the financing tied to Aramco’s USD 11 bn Jafurah midstream lease-and-leaseback transaction, Reuters reported. Bank of China, ICBC, and China Construction Bank each contributed around USD 1 bn, and Agricultural Bank of China roughly USD 750 mn.

Chinese lenders entered Jafurah through debt, and the equity consortium is US-led. Chinese investment funds stayed out of the equity amid US-China trade tensions, even as Chinese lenders took part in financing the transaction. The consortium, led by BlackRock’s Global Infrastructure Partners, acquired a 49% interest in Jafurah Midstream Gas Company, and Aramco retained 51%, so Chinese institutions financed the Saudi gas assets without joining the American-led equity investment.

Saudi Electricity Company secured a USD 3.6 bn syndicated loan in December 2024, with five Chinese lenders among 13 banks. The others come from Germany, India, the UAE, Kuwait, and Saudi Arabia, according to a Tadawul disclosure. The unsecured facility has a five-year term, extendable by another two years, and is for general corporate purposes.

Acwa Power, Badeel, and Saudi Aramco Power Company secured USD 5.9 bn in senior debt that includes four Chinese banks. The debt is for seven solar and wind projects totaling 15 GW, as part of a wider USD 8.2 bn investment program, and the lenders include Bank of China, China Construction Bank, China Minsheng Bank, and ICBC, alongside European, Japanese, Saudi, and Emirati institutions.

In Abu Dhabi, three Chinese banks are among more than 20 lenders in Adnoc’s financing of up to USD 11 bn for its Hail and Ghasha offshore gas development. Adnoc and its partners commit future gas volumes to processing facilities, which gives lenders long-term contractual cashflows while Adnoc keeps operational control of the assets, according to its press release.

Beyond the loans

Chinese lending is closely tied to China’s ambitions in energy, infrastructure, and construction. Amandeep Kaur Ahuja, a MENA geopolitical risk consultant and researcher tells us the lending complements China’s involvement in infrastructure development, where financing and construction projects often go hand in hand. “China is one of the largest buyers of Gulf hydrocarbons, and Chinese firms like Sinopec and CNPC are big participants and investors in the industry. Chinese firms are also big players in EPC contracts and manufacturing investment in the Gulf. All of this suggests that an ecosystem is developing but not in the ‘tied export credit’ sense,” Hari argues.

Saudi renewables show the overlap, with Chinese lenders and Chinese contractors on the same projects. Chinese lenders are participating in Acwa Power’s 15 GW, while China Energy Engineering-linked firms won about USD 2.7 bn in contracts covering the Khulais solar and Shaqra wind projects, and PowerChina subsidiaries secured around USD 1.6 bn for two Afif solar plants.

In Qatar’s LNG, Chinese state oil companies are minority partners and long-term buyers. Sinopec holds a minority stake in both North Field East and North Field South and has signed 27-year agreements to buy a combined 7 mn tons a year. China National Petroleum Corporation (CNPC) holds a minority stake in North Field East and a separate 27-year agreement to buy 4 mn tons a year.

CNY lending is another strand of the relationship. A government in an unnamed UAE emirate secured a CNY syndicated loan worth about CNY 1.8 bn in 2025, Bloomberg reported. Acwa Power also took an USD 80 mn equity bridge loan from Bank of China in 2024 for a solar and battery storage project in Uzbekistan, with half in CNY and half in USD.

Lender diversity

Chinese banks have become important financiers of Gulf infrastructure. Their ability to provide large loans, attractive pricing, and longer maturities has made them increasingly important, García-Herrero adds, and they offer flexible financing structures and stay willing to back strategic energy projects when Western banks grow more cautious over geopolitical risk or compliance concerns. Their growing role in CNY-denominated financing gives Gulf borrowers another option, she adds.

Asia is now the first call for large Gulf financings, García-Herrero argues. “Asia has become the first call,” she says. Chinese financial institutions have moved from secondary lenders to the leading foreign source of syndicated financing for Gulf borrowers. “They are becoming a genuine major alternative, not just an add-on, with clear market-share growth,” she adds.

Chinese lenders share the region’s risks: “Chinese banks partly withdrew or reviewed Middle East exposure when conflict escalated in March 2026, demonstrating that Chinese lenders are exposed to the same regional risks and can act in response to their own regulators. Chinese finance therefore increases lender diversity but also adds new vulnerabilities in the form of Chinese regulatory decisions and US-China tensions,” Hari tells us. More lenders should improve resilience, he adds, but “it is not a hedge against geopolitical or financial disruption.”

Gulf borrowers keep considerable bargaining power by keeping relationships with Chinese, Western, regional, and other Asian lenders. China’s emergence as another substantial source of capital gives them more room to negotiate financing terms, while Gulf governments keep control of their infrastructure strategies, Hari notes.