Planned Mena power sector investments slump by simply a third amid pandemic, Apicorp says
30 December, 2020
Prepared investment in the centre East and North Africa region’s power sector slumped simply by a third amid the pandemic-driven slowdown this year. However, investments already focused on the sector remained secure in 2020, in line with the Arab Petroleum Investments Company.
The $114 billion drop in planned funding is powered partly by several regional projects being relocated to committed investment status in 2020, Apicorp, a multilateral lender focused on the energy sector, said in its 2020-2024 Mena Power Investment Outlook report.
Stalled projects on Iran, Iraq, Tunisia and Lebanon due to the immediate impact of the pandemic also drove the overall value of prepared investments downwards, Apicorp said on Tuesday.
Other factors that contributed to the reduction in planned investments included elevated surplus capacities on Egypt and Saudi Arabia.
“Compared to various other energy sectors, the expenditure landscape in the energy sector held relatively steady despite the Covid-19 pandemic,” Ahmed Ali Attiga, leader of Apicorp, said.
“We expect the power sector to play a good vital role found in accelerating the post-pandemic recovery process as enhancing energy secureness and digital services undertake increased strategic importance."
In its 2019-2023 projections made this past year, Apicorp, which funds energy sector jobs in Opec-member countries, predicted overall investment in the Mena’s energy sector to attain $1 trillion, with the power sector accounting for the major share of spending at 36 per cent.
Planned projects represent nearly two-thirds of the full total benefit of the 2020-2024 Mena power sector’s job pipeline. Mirroring global trends, renewables currently account for the most significant show of planned and dedicated power projects for the five-year period at around one third of total investment worth.
Oil and gas-fired electricity plants take into account 27 per cent of total investments, even though nuclear vitality and coal represent 15 % and 3 % respectively.
The increased penetration of clean energy in the Mena region is driven by unprecedented cost declines in renewable energy and governments’ renewable energy targets, which range from 13 % to 52 % of installed capacity by 2030.
However, the lack of grid-scale storage ensures that fossil fuels - generally gas - and nuclear, will stay indispensable to the power supply mix later on, Apicorp said.
The recent push by several countries to improve regional electricity interconnectivity may lead to a rise in investments in power transmission and distribution projects, it added.
Mena economies, especially the six-member economic bloc of the GCC, have invested heavily in energy generation projects in the last couple of years. Saudi Arabia and the UAE are pursuing ambitious power technology targets to meet up future demand, as the region has as well opened up power generation projects for private sector expense.
However, the purpose of the private sector and funding in the energy industry will mainly remain dependent on sector reforms and government guarantees, according to Apicorp.
“Looking ahead, policy proficiency and the digitalisation of the energy sector weigh in as the utmost influential factors in the future for power require and investments,” Leila Benali, chief economist at Apicorp, said.
"In addition to learning to be a more interconnected vitality market, the Mena location holds vast probable as an exporter for net-zero products, specifically given the change towards electrification from options such as for example hydrogen and ammonia.”
Source: www.thenationalnews.com
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