Saudi Arabia has the largest committed and planned energy investments in the Middle East and North Africa (MENA), as the overall regional investment will amount to $1 trillion over the next five years, the Arab Petroleum Investments Corporation (APICORP) said in a new report.
The total planned and committed MENA investments in the energy sector will require substantial funding from the private sector, it noted.
The share of overall non-government-led investments has increased from the previous year to 22 percent, as the private sector plays an increasingly vital role in supporting energy projects, particularly in countries with weaker fiscal reserves and/or higher share of power sector projects, the report added.
Tunisia and Morocco ranked the highest with the private sector accounting for 68 percent of total planned and committed energy investments, followed by Jordan at 46 percent. The UAE, Oman and Egypt also exhibited a greater penetration of private sector participation, rising to 30 percent, 29 percent and 28 percent respectively.
“While all MENA countries continue to push on with investment in the energy space, there will be several challenges and constraints over the medium term. We see the private sector as a critical player in financing the region’s energy investment plans going forward while freeing up revenues for other areas in the economy,” said Ahmed Ali Attiga, CEO, APICORP.
The UAE and Kuwait have ambitious programs throughout the value chain as, Iraq will focus on rebuilding its energy infrastructure, the report said.
Meanwhile, most of the MENA region will see a greater transition to the gas, downstream and petrochemical sectors, as well as significant renewable energy additions.
Power projects currently makes up 36 percent of the region’s total investment as demand for electricity rises, with 34 percent of this making up investments in renewables due to its continued momentum.
Total investments in the gas sector will amount to $186 billion, of which just under half is committed. In addition, gas demand in the MENA, as a primary growth region, will continue to grow by two per cent per year over the next five years.
Investments in the petrochemical sector continue to rise, with total investments marking more than $123 billion, which includes $33 billion for projects currently under execution, the report said.
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