While other global banks have pulled back from this asset class - one that has often proved to carry equity-style risk with debt-style returns and is set to be hit by high new capital standards under Basle II - Citigroup remains pre-eminent. According to Dealogic Projectware, in the past year it was the leading arranger of project loans, the leading bookrunner of project bonds and the leading adviser to project deals.
Problem loans to the once-vibrant US power sector and in telecoms-related projects have caused some banks to re-examine the risks and returns of project assets and their ability to distribute them. It's a particular problem for banks that specialize in one region or a few sectors and whose distribution capacity is exposed to a drying up of demand in any regional bank market.
But Citigroup's reach and breadth of business gives it some protection from a downturn in any region, industry sector or type of project.
For example, it sees infrastructure financing, rather than power, becoming a mainstay now in developed markets, notably Europe. This should compensate for falling volumes elsewhere.
And there are other hedges against business cycles built into its approach to project finance.
