In the competition to be the Middle East’s leading international financial centre, Bahrain is moving out in front with the Bahrain Financial Harbour (BFH) project.

The $1.3bn BFH is the island state’s commitment to providing the infrastructure to attract investment in the financial services sector. With over 22% of Bahrain’s GDP already coming from financial services, it is easy to understand why the sector has been marked out for a special investment push.

“We want to leverage Bahrain in terms of it being a financial centre for the Middle East and for it to bridge the gap between Europe and Asia,” says Esam Y Janahi, chairman of the Bahrain Financial Harbour Holding Company. Mr Janahi is also chief executive officer of Gulf Finance House, the four-year-old Islamic finance and investment house that is serving as the project’s investment bankers. GFH will eventually take 11,000 sqm of floor space in the financial centre.

“Bahrain Financial Harbour is a revolutionary international financial centre that will empower the global financial community,” says Mr Janahi. “This is a national landmark to benefit the whole nation through creating more job opportunities, boosting GDP and increasing foreign direct investment.”

The project is nothing if it is not ambitious. Graphics illustrating how the BFH will look when completed show a series of sleek modern buildings rising up from the waterfront. As well as the two 50-storey towers that will house banks and financial institutions from around the world, BFH will be comprised of residential towers, shops, hotel accommodation, conference centre, entertainment facilities and a pleasure craft marina to provide a self-contained lifestyle unit.

Final figures

Translating this concept into hard numbers, when completed, the BFH will offer a total of 190,000 sqm of residential space, 250,000 sqm of commercial space and 30,000 sqm of retail space.

The BFH is located by the Bab Al-Bahrain, the historic gateway to Manama, Bahrain’s capital. By December 2003, almost 24,000 sqm of landfill had been put in place as part of the project’s first phase together with pilings for the financial centre buildings.

The lead consultants on the project are Ahmed Janahi Architects. CEO of the company Ahmed Abubaker Janahi says: “We are already on site and we have done the piling and moved onto the next stage. Phase one should be complete in three years and the whole thing should be finished in five years.”

A key focal point of the BFH will be the Financial Mall which will house all Bahrain’s capital market activities including the Bahrain Stock Exchange, brokerage and trading firms. “The Mall will be the assembly point of all the different people residing in the harbour, working thereor visiting,” says Mr Ahmed Janahi.

Financial incentives

Bahrain has a tradition of being investor friendly and offers a tax-free environment where 100% foreign ownership is allowed. In the financial sector, the Bahrain Monetary Authority is noted both for being a strong regulator and for operating in a transparent manner.

Bahrain already boasts some 300 banking, insurance and financial institutions but not all of these are expected to move into the BFH, and chairman Mr Esam Janahi says that “the emphasis will be on attracting new institutions”.

Insurance will be a focus, with the 16-storey Bahrain International Insurance Centre making up one of the new BFH buildings, as will Islamic banking. Bahrain is already home to 27 Islamic banks with assets of $3.6bn, as well as six Islamic insurance companies.

The BFH has to compete against Dubai, where a new financial centre is also being built, and Saudi Arabia where a new capital markets law has made the investment environment more attractive. But given the degree of investment and planning, there seems little doubt that Bahrain will be able to hold its own against such competition.