The Arab Petroleum Investments Corporation, a multilateral development financial institution, has estimated that energy investments in the Middle East and North Africa regions would exceed $805bn over the next five years.
The APICORP disclosed this in its ‘MENA Energy Investment Outlook 2021-2025’, released on Tuesday.
The overall planned and committed investment is a $13bn increase from the $792bn estimated in its last five-year outlook.
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The rise was attributed to four factors, which include a strong confidence in the rebound of global gross domestic product; rising energy demand; the comeback of Libyan projects, which alone accounts for around $10bn in planned projects; and the accelerated pace of renewables in the region.
On current estimates, it showed that MENA will add three gigawatt of installed solar power capacity in 2021 alone, to double that of 2020 and 20GW over the next five years.
The region’s economic forecasts suggest that commodity prices and exports will drive the rebound expected for most MENA countries in 2021.
The report further showed, however, that the region’s economies remain under fiscal strains due to unprecedented high debt levels and decline in oil prices, tourism/Hajj revenues, and personal remittances.
The Chief Executive Officer of the corporation, Dr Ahmed Attiga, 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.”
Further analysis showed that renewables claim a share of almost 40 per cent of the estimated $250bn in power sector investments; with committed gas investments projected to fall by $9.5bn to $75bn after completion of several megaprojects in 2020.
However, APICORP advised that an evolution in regulations was needed for MENA region to realise its energy storage potential, adding that additional capacity particularly from renewables, would make power trading a more commercially viable option in the region.
“MENA can emerge as a major blue and green hydrogen-exporting region thanks to low-cost gas resources and strong renewable energy progress,” APICORP added.
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