GCC needs $131bn in power investment in next five years

DUBAI / WAM

A new report from Middle East Electricity (MEE) states the GCC requires a combined $131 billion worth of investment in electricity generation, transmission and distribution over the next five years to cope with increasing demand from growing populations, expanding economies and climatic changes.
The report, ‘GCC Power Market’, reveals that despite the GCC’s current power-generating capacity of 157 Gigawatts (GW) – which equates to 43 percent of all Middle East and North Africa capacity – its six states will still require $81 billion investment for another 62 GW of increased capacity and $50 billion for additional transmission and distribution.
Saudi Arabia accounts for the largest spend needs with $36 billion required for generation and $23 billion for transmission and distribution, followed by the UAE at $22 billion investment needed for generation and $13 billion for transmission and distribution. Kuwait requires the third largest investment with $8.4 billion needed for generation and $5.2 billion for transmission and distribution, followed by Oman at $6.8 billion and $4.2 billion respectively, with Bahrain needing the least investment level at $1.9 billion and $1.1 billion.
The report, produced for the Middle East Electricity exhibition by Ventures Onsite, says much of the investment is likely to come from public-private partnerships (PPP) if a regulatory framework is introduced to incentivise independent power producers (IPP).
Over the last two decades, the PPP model has become the most attractive financing mechanism for the GCC power market with the model helping to ease the strain on government finances in delivering complex
engineering solutions and delivering advanced technology solutions. The report outlines reliance on IPPs will grow but warns, “According to industry experts, there also arises the need for the power sector to establish a regulatory framework to push for the private sector’s participation.”