The Arab Petroleum Investments Corporation’s (APICORP) Energy Research estimates that in the period 2016-20, the region will need to invest $334bn in its power sector. Of this, $198bn will be needed to add 147GW of generating capacity, with the rest to be invested in transmission and distribution (T&D).
In the GCC, as well as adding capacity, some countries have introduced limited energy reform programmes. In the Mashreq region, inadequate investments and instability have weighed on the power sector; while in the Maghreb region, renewable-energy projects are at the forefront of long-term government plans to diversify power-generation capacity.
To meet rising demand for electricity in MENA, APICORP estimates that the region’s power capacity will need to expand at an average annual pace of 8% between 2016 and 2020, which corresponds to additional capacity of 147GW. Its estimates show that 96GW of capacity additions are already in execution, with a combined investment of $117bn.
The GCC represents 47%, or 148GW, of current MENA power-generating capacity. Despite this, the GCC will require $85bn for the addition of 69GW of generating capacity and another $51bn for T&D over the next five years. But below par oil revenues mean that GCC governments can no longer continue to support the provision of cheap power. Subsidy reforms announced earlier this year are part of a programme that aims to liberalise domestic energy prices over the medium term. Saudi Arabia increased electricity tariffs for specific consumption levels, and the UAE introduced electricity reforms, with non-nationals bearing the brunt, while Qatar also hiked electricity prices in October 2015.
Source: APICORP Energy Research
