$260bn investment needed to meet Mena electricity demand

MANAMA: The Arab Petroleum Investments Corporation (Apicorp), the multilateral development bank focused on the energy sector, forecasts that the Mena region will require $260 billion of investment to meet rising and suppressed electricity demand.

Its latest research report, which this month focuses on the regional power sector, says in the GCC, governments have coped well with rising electricity demand.

However, recent increases in electricity prices in Saudi Arabia will slow demand growth.

In the Mashreq region, inadequate investment and political instability have weighed on the power sector, and persistent blackouts continue to put pressure on governments to take action.

Apicorp’s report also notes that electricity demand and consumption have been growing rapidly in the Mena region, driven by population growth and urbanisation, rising income levels, industrialisation, and low electricity prices; and while economic growth has slowed compared with historical highs, the International Monetary Fund still expects an increase of 3.2 per cent in 2018 and 2019, rising to 3.5pc in 2022.

The region’s population is also expected to grow at an average rate of 1.5pc per year in that same period.

In order to meet this rising demand, Apicorp estimates that Mena power capacity will need to expand by an average of 6.4pc each year between 2018 and 2022, which corresponds to additional capacity of 117GW.

It forecasts that $152bn will be needed to deliver this additional capacity, with a further $108bn needed for transmission and distribution.

Source: http://www.gdnonline.com/Details/347966/$260bn-investment-needed-to-meet-Mena-electricity-demand