The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, will continue to support Saudi Arabia’s energy sector through debt, equity and advisory services, Mustafa Ansari, senior APICORP economist, told Argaam.
“Saudi Arabia is a major part of our portfolio, and we intend to continue supporting the energy sector in the country, in line with our vision to be the trusted strategic advisor and financial partner for the Arab energy sector,” he added.
However, no details of its new funding plans for the Kingdom were shared. But, as part of its commitment to the Kingdom’s energy sector, APICORP has granted a SAR 202.65 million ($54 million) facility in July 2018 to Saudi-based contracting company ARKAD to develop the country’s strategic master gas system project.
In a recent report, APICORP expected investments in the MENA energy sector to reach $1 trillion in the next five years. It further estimated that 87GW of capacity additions were already at the execution stage, translating into an estimated $142 billion for power generation, and nearly $68 billion for transmission and distribution.
When asked what financing options must be adopted by Saudi Arabia to accelerate renewable energy deployment, Ansari said that meeting the Kingdom’s ambitious renewable energy targets will require higher levels of participation from the private sector.
“This can be in the form of providing the financing needed to see these projects being commissioned and ensuring the delivery of the projects more efficiently and on time. The government’s role will be to ensure a conducive environment to encourage and attract wider participation, including the regulatory framework and advancing the energy reform measures.”
Earlier this year, Saudi Arabia set a new 58.7GW renewable energy target for 2030, in line with the National Renewable Energy Program.
“Saudi Arabia has ambitious energy targets for 2030 and has undertaken several energy reform measures, including the reduction of energy subsidies and the prospects of unbundling the state utility company (SEC),” Ansari said.
“These measures are a step in the right direction, but the key issue which must be addressed to create market conditions that are truly conducive to achieving the Kingdom’s ambitious targets is the current regulatory framework, as this would create a more efficient energy market and encourage the private sector to support the government’s efforts,” he stated.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
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