MENA region needs $250bn for electricity grid expansion, report finds


Dammam, Saudi Arabia — (METERING.COM) — November 2, 2012 – Against a background of fast growing demand for electricity, the Middle East and North Africa (MENA) region’s power sector needs investment of $250 billion over the next five years, according to a report from the Arab Petroleum Investment Corporation (APICORP).

Of this, $102.7 billion would be required for transmission and distribution ($27.5 billion and $75.2 billion respectively) and the balance of $147.6 billion for generation. About 40 percent of these amounts would be for the Gulf Cooperation Council (GCC) countries, i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, which is the fastest growing region in MENA.

According to the report in the absence of active demand side management, the capacity growth to meet demand is 7.8 percent per year, which translates into a five”year increment of 124 GW above the 2012 level (251.6 GW in 2011).

The growth in demand is due to high population growth, fast expanding urban and industrial sectors, increasing needs for air conditioning, and heavily subsidized electricity tariffs. With ongoing turmoil in parts of the region, catching up with unmet demand may be perceived as socially and politically more desirable, notes the report.

The report also notes that T&D projects, along with upstream and midstream projects, will continue depending heavily on internal funding in the form of either corporate retained earnings or state budget allocations.

For the purpose of the report MENA includes the Arab world and Iran.