The power investment needs of the Middle East and North Africa in 2019-23 are nearly $209 billion

The Arab Oil Investment Company (APICORP) announced that the MENA region will need nearly $209 billion in electricity investment over the next five years, of which 32% will be used for transmission and
distribution.

In a recently published report, APICORP said the region will need to add 88GW of installed power capacity
by the end of 2023.
Most of the MENA region's energy sector funding needs will go to the power sector, with renewables accounting for 34%.

The MENA region will need to install 88GW of generation capacity between 2019 and 2023, which is expected to translate into nearly $142 billion in investment in power generation and nearly $68 billion in
transmission and distribution.

The private sector, which is critical to risk management and financing, remains largely dependent on reforms, as the share of government investment remains as high as 78 percent
, the report notes.

Slowing demand and consequent overbuilding in countries such as Saudi Arabia are expected to continue, even as the kingdom begins to reform its power sector
.

Between 2007 and 2017, electricity consumption in the MENA region increased by 5.
6%.

This is driven by rapid economic growth, industrialization, rising income levels, high population growth and urbanization, coupled with low electricity prices
.

Gulf states have been able to match this growth with a proportional increase in capacity, but countries outside the GCC have struggled to keep up with growing demand
.

Providing reliable and affordable electricity remains important for governments and vital
to the stability of countries.
While addressing infrastructure and regulatory barriers, it is also important to
improve energy efficiency and support the public with smarter, more responsible consumption.

As a result, APICORP expects electricity demand growth to slow to around
3.
8% over the next five years.
APICORP estimates that nearly $350 billion could be invested in the power sector in the MENA region over the next five years, with renewables accounting for 34% of electricity investment and 12%
of total energy investment.

Jordan and Morocco lead the region
through renewable energy initiatives.
Morocco's share of renewable energy in total electricity generation is scheduled to reach 42%
by 2020.

At the end of 2018, Saudi Arabia had an installed capacity of 88.
5GW, equivalent to a quarter
of the total capacity in the MENA region.
In 2017, total peak demand was 70GW, keeping the country's reserve margin at a healthy level
of 21%.
After decades of rapid growth, demand growth has slowed
significantly.
Slow population growth is a major factor, and lower-than-expected economic growth is also putting downward pressure
on electricity demand.

The UAE launched its Energy Strategy 2050 in 2017, which aims to double the contribution of clean energy to meeting electricity demand to 50%
by 2050.
Solar power has a prominent place in its plans and is expected to account for 25%
of this power mix once its $13.
7 billion solar park is fully operational in 2030.

The UAE needs to invest at least US$16.
2 billion to meet the projected demand for an additional 8GW of capacity over the medium term
.
The country is making a big push to diversify its energy in the energy mix, "we estimate that nearly 14GW of capacity additions are already being implemented
.
”

As for Egypt, electricity demand grew by 4.
6% between 2015 and 2017 and is expected to grow to 5.
1%
by 2023.
"Egypt will need to invest $20 billion in power generation and a further $10 billion in transmission and distribution infrastructure
.
By 2023, this will increase the capacity of the most populous country in the Middle East and North Africa to 63GW.

”

APICORP estimates that Iraq will need to invest $21 billion over the next five years to increase power generation capacity to 30GW.