MENA energy investments to exceed US$805bn over next five years

AdobeStock 408700012Arab Petroleum Investments Corporation’s (APICORP), MENA energy investment outlook has seen a modest US$13bn rise in committed and planned energy investment compared to previous year’s outlook

Renewable claim a significant share of almost 40% the estimated US$250bn in power sector investments, committed gas investments projected to fall by US$9.5bn to US$75bn after completion of several megaprojects in 2020. An evolution in regulations is needed for MENA region to realise its energy storage potential, additional capacity particularly from renewables will make power trading a more commercially viable option in MENA

MENA will add 3GW of installed solar power capacity in 2021 alone double that of 2020 and 20GW over the next five years.  

Dr. Ahmed Ali Attiga, CEO of APICORP, said, “APICORP’s MENA Energy Investment Outlook 2021-2025 indicates that energy industries are entering a period of relative stability in terms of investments as most MENA countries return to GDP growth in 2021 and the energy transition showing no signs of slowing down. We anticipate a slow but steady recovery of the energy sector from the fallout of the COVID-19 pandemic, supported by continued investment from the public sector and an upswing in demand.”

Gas investments

Committed gas investments in MENA for the period 2021-2025 are expected to total US$75bn – US$9.5bn less than the previous outlook. The decline is attributed to the completion of several mega projects in 2020 and countries being more cautious to new project commitments in an era of gas overcapacity.  

Qatar, Saudi Arabia, and Iraq are the top three MENA countries in terms of committed gas investments. This is owed to Qatar’s North Field East megaproject, Saudi Arabia’s gas-to-power drive and the massive Jafurah unconventional gas development which is poised to make the kingdom a global blue hydrogen exporter and Iraq’s gas-to-power projects and determination to cut flaring and greenhouse gas emissions.

Power investments

Power investments in MENA for 2021-25 remain largely unaffected compared to APICORP’s 2020-24 outlook. Notably, the sector’s total investment amount of US$250bn is the highest of all energy sectors with an estimated US$93bn and US$157bn in committed and planned projects, respectively, over the next five years.

With a share of around 40%, renewables form a significant part of those investments as countries push ahead with their energy diversification agendas. In the GCC, Saudi Arabia’s Renewable Energy Project Development Office and Public Investment Fund projects continue to progress. North African countries are also showing measurable development in renewables realm.

Petrochemicals investments

Planned investments in the MENA petrochemicals sector are forecast to increase to USD109 billion in 2021-2025, an US$14.2bn jump compared to last year’s outlook. By contrast, committed investments dipped by US$7.7bn to around US$12.5bn due to the completion of several megaprojects in 2020.

Renewables investments

As a whole, the MENA region expects to add an estimated 3GW of solar power in 2021 doubling its total from 2020 and almost 20GW by 2025. Wind and other sources such as hydropower are also coming into their own as countries step up their energy diversification plans.

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