Investments in energy across Mena region to exceed $805bn mark by 2025
Energy investments across the Middle East and North Africa could exceed $805 billion over the next five years amid rising demand in the region and the revival of crude output in locations such as Libya.
Renewables, which are increasing as a share of the power mix, particularly in the oil-exporting countries of the region, will rise to 40 per cent of the overall share. Cleaner energy will account for $250bn worth of investments in the utilities sector over the next five years.
With the completion of several large projects in the region in 2020, committed gas investments will decline by $9.5bn to $75bn.
“Energy industries are entering a period of relative stability in terms of investments as most Mena countries return to GDP [gross domestic product] growth in 2021 and the energy transition showing no signs of slowing down,” said Ahmed Attiga, chief executive at Apicorp.
“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.”
Regional energy investments will receive a new injection from the comeback of upstream projects in Libya, which will account for $10bn in planned projects alone.
Renewable energy projects are also set for growth, with 3 gigawatts of installed solar capacity set to be added to regional grids this year. The capacity increase is double the volume added last year. The region will also receive 20 gigawatts of renewable power capacity added over the next five years.
Notable increases will also come from non-oil exporting countries. Jordan, which increased its renewables capacity to 20 per cent this year from 1 per cent in 2012, has plans to grow the share to 30 per cent of the energy mix by 2030.
Renewables’ share of electricity is 37 per cent in Morocco, and comprises 90 per cent of the kingdom’s 3.5 gigawatts of capacity in the pipeline.
The UAE is also expected to experience growth in renewable energy capacity after reaching 6 per cent total installed capacity and 3 per cent power generation last year. The Opec producer’s solar capacity is also expected to grow at the fastest rate in the region, with nearly 5 gigawatts of solar schemes in the pipeline.
Saudi Arabia, which plans to add 50 per cent of renewable capacity to grid, and increase investments in hydrogen, will only add clean energy capacity of 3.3 gigawatts, which is far from its target of 27.3 gigawatts by 2024.
Iraq, Opec’s second-largest oil producer, is also in the process of choosing developers for a 755 megawatts solar project.
The country has ambitions of adding 10 gigawatts of solar power capacity and generating a fifth of its power from the sun by 2030.
In the downstream hydrocarbon sector, planned investments are expected to increase to $109bn between 2021 and 2025.
The Mena region is also a “strong candidate for becoming a major hydrogen-exporting” centre, Apicorp said in its annual investment outlook.
Renewables, which are increasing as a shareA refinery on Libya’s El Sharara oilfield. A return to upstream projects in