Force majeure clauses are under the microscope as infrastructure investors across the Middle East grapple with unforeseen project risks in a volatile environment. New deals might be put on ice or are proceeding cautiously, but ongoing financings carry on.

International infrastructure investors and lenders in the GCC are delicately balancing backup personnel safety plans and a business-as-usual stance in the wake of the Iran conflict.

Despite US President Donald Trump’s comments on Monday (9 March) that the war would end “very soon”, infrastructure executives are bracing for the possibility that it won’t.

“There is a lot of uncertainty, and like most international companies operating in this region, we are preparing evacuation plans for our personnel in case this conflict extends beyond a few weeks,” a Dubai-based senior executive with a global infrastructure investor, said.

The source added they are continuing to work from home on a business-as-usual fashion, but they are also closely monitoring the situation, which he describes as the “new normal”, 12 days since Iran began a barrage of missile and drone attacks against most GCC states, in retaliation for US and Israeli bombardment.

So far, some desalination plants, airports and data centres have been damaged by strikes, although most privately-owned infrastructure assets such as PPPs, oil and gas pipelines and power generation facilities have been left unscathed.

Public and private-sector executives are determined to carry on with projects as much as possible.

For instance, construction work at the Al-Dhafra gas-fired power plant near the Al Dhafra airbase in Abu Dhabi resumed, albeit with additional security measures in place, two days after the airbase was targeted by an Iran missile attack, according to one source.

Dubai Municipality has also requested to hold face-to-face meetings next week with the bidders of the first phase of its USD 22bn tunnels PPP next week, despite a voluntary work-from-home policy across many private companies especially in the UAE, a source familiar with the tender process told Infralogic.

Despite this, most companies are preoccupied with the de facto closure of the Strait of Hormuz, the narrow waterway that represents the only route to open sea for all ports dotted along the Arabian or Persian Gulf, as well as the repercussions to their businesses if the conflict drags on.

A senior executive with a European developer, which has won PPPs in several GCC states, noted that his company is continuing projects where it is safe to do so “although it is difficult to estimate the lead time impact now due to the rapidly evolving situation”.

He said he expects projects that have already been awarded and closed to continue progressing steadily, while those in the early phases of procurement will likely be delayed until the situation settles down.

Dozens of projects are under construction across the GCC, among the roughly 70 PPPs that have reached financial close over the past three years, according to Infralogic data.

Counterparties in a contract have an option to invoke force majeure clauses in their contracts when push comes to shove, and this should offer some comfort, a lawyer who frequently advises infrastructure project sponsors in the GCC said.

Force majeure clauses in contracts excuse liability or performance obligations during unforeseen events such as wars or natural disasters. Generally, contractors or suppliers invoke force majeure, as Qatar did on its gas deliveries last week, to seek relief from compensation requests for their inability to fulfil contracted obligations.

“Our clients are working as usual, at the same time reviewing their contracts for force majeure clauses, but it’s too early to raise notices or initiate claims,” the lawyer told Infralogic on Tuesday (10 March).

The spectre of cascading political force majeure claims is within the realm of possibility, but everyone will want to avoid acrimonious and lengthy legal proceedings.

This was confirmed by the European infrastructure developer, who said their legal department has undertaken a review of force majeure clauses in most of their contracts in the first two days of the ongoing conflict.

*Data as on 12 March 2026

This is seen as a precautionary measure, as the company continued operating at most of its project sites “in so far as possible, which is more sensible rather than relying on any potential claim”.

One of the sources who spoke with Infralogic said that while a force majeure trigger frees both private sponsors and contractors from penalties and delays, it does not necessarily relieve engineering procurement and construction (EPC) contractors from all obligations, until the contract is cancelled.

Depending on their specific contract provisions, the EPCs can claim additional costs due to exceptional situations or instead request additional time to complete a project, the source said.

A Dubai-based executive with an international law firm agrees. “EPCs, whose contracts often include bringing equipment from overseas to a domestic location, will tend to be more forthright and conscious of force majeure clauses protecting their rights, due to increased costs arising from shipment delays or higher insurance fees, or both,” the lawyer explained.

In contrast, counterparties in offtake contracts across the GCC region will tend to want to avoid triggering force majeure clauses, according to a senior executive with one of the big three global consultancies.

“This is not an adversarial environment,” the consultant noted, adding that the procurers and government agencies have adopted a sensible and supportive tone and a willingness to be flexible when it comes to potential project delivery delays.

“They are saying that if the sponsors or contractors can prove that the recent events are disrupting their business operations, then they will be flexible to accommodate limited delays and avoid going down that [force majeure trigger] path,” he explained. “This ensures that a force majeure trigger will not kick in unless both parties agree.”

The ongoing conflict is also expected to affect projects that are in the early procurement stages or were nearing award or financial close before the war began.

“You’d expect procurers who received bids in the past two months to probably delay or re-schedule clarification meetings, depending on their jurisdictions, or to hold back from issuing new tenders until the situation stabilises,” the law firm executive explained.

Projects nearing financial close are still proceeding apace, he noted. For example, a sponsor that has been recently awarded a preferred bidder letter for a project indicated it wants to reach financial close on schedule.

“Naturally there might be a need to monitor market dynamics and keep a note on the tariff submitted let’s say last year, and factor in any potential consequences [of this conflict] into the tariff and implementation schedule,” he added.

Source: Infralogic

According to Infralogic data, several major utility projects in Saudi Arabia, the UAE and Qatar, in particular, were nearing financial close before the war broke out.

Most sources contacted by Infralogic who are involved in these projects said the target financial close for these projects remains unchanged although limited delays will be likely.

In the same vein, some corporate financing deals may be heading for a bit of a rough patch although this also depends on jurisdictions and how far advanced they were before 28 February, when the conflict began.

“Most banks are focusing on closing out deals that are already pretty much there as well as on monitoring their existing portfolio,” an executive with an international bank said, adding that the current situation could make origination and pricing new deals very challenging.

As an example, one of this year’s most anticipated transactions in the region, the estimated USD 7bn saleof part of Kuwait’s existing oil pipeline networks, will now have to proceed delicately, according to the banker.

Bidders interested in the sale have started submitting documents to Kuwait National Petroleum Company, and based on the original timeline, banks interested in financing the deal should now be going back with quotes, which is going to be a “very uncomfortable ask” for them due to the prevailing uncertainty, he explained.

The slower-than-usual flow of work during Ramadan, the month-long fasting period among Muslims, complicates assessing the full extent of the impact of the first 12 days of the war on project activities across the GCC, a transaction consultant based outside of the UAE told Infralogic.

“Usually work picks up after eid,” said the consultant, referring to the holiday marking the end of Ramadan, which this year ends on 20 March. “If it does not, then that will give us a very clear view.”

Yet the overall mood ranges from hopeful to sombre. The senior executive at the global utility investor remembers clearly what he was told before taking on the overseas posting in Dubai about five years ago.

“They said Iran will never attack the UAE because they have billions of dollars parked here,” he said. “That notion certainly ended on 28 February”.