Abu Dhabi-based sovereign wealth fund Mubadala, which has tapped capital markets to refinance its majority-owned Dolphin gas pipeline linking Qatar with the UAE and Oman, has seen interest for its project bonds beyond the traditional US pool of investors, said Derek Rozycki, executive director for project and corporate finance at a conference.

"We now see more interest from European and Gulf investors, particularly London-based asset managers and emerging market funds," he said.

"Investors have been burnt by holding a slice of a slice of a million different things, they like holding paper in a project where they know how much money is coming in and how much money is coming out."

However, Rozycki cautioned that project bonds lack the liquidity of sovereign and corporate bonds and that asking investors to take construction risk was challenging. "They may need extra love to get them through, how you price the deal is important," he said.

Having funding alternatives means developers are under less pressure to put in their own money as equity in projects, he added.

"There is a gap in the market, and bonds can finance the same kind of projects as loans," Rozycki said.

Liam O'Keeffe, a project finance loan syndicator for Credit Agricole, told the conference that project financing is recovering from the fall-away seen in early 2009, buoyed by growth in Asia, but developers have to look at a mix of funding options for their schemes.

"There is a huge amount of competition for capital within banks," Andrew Bartlett, head of oil and gas project finance for the British bank Standard Chartered, said.