Middle Eastern and North African (Mena) states will need to invest $334 billion over five years to meet rising power demand in the Mena region, said a development bank on Wednesday.
The Arab Petroleum Investments Corporation (APICORP) said in a report that more than half the amount, $198 billion, will be needed to add 147 gigawatts (GW) of generating capacity until 2020, to the existing 315 GW capacity.
The rest will go for transmission and distribution networks, said APICORP, the development bank of the Organization of Arab Petroleum Exporting Countries.
Electricity demand in the Mena region has been growing, driven by population growth, industrialisation and low power prices, the report said.
Despite projections for lower economic growth for the region, APICORP estimates that Mena demand for electricity will grow at an average of eight per cent per year through 2020.
It estimated that 96 GW of the required additional capacity are already in the execution stage. The Gulf Cooperation Council (GCC) currently has 47 per cent, or 148 GW, of the Mena power generation capacity.
Still the GCC - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates - will need investments worth $136 billion to add a further 69 GW until 2020, the report said. Saudi Arabia is expected to account for $71 billion of the investments.
Iran is estimated to need $63 billion in investments to boost its power production by 23 GW to 93 GW over the next five years, the report said. Iraq will need to spend $40 billion to double its electricity production to 29 GW. Egypt, the most populous nation in the region, is estimated to need $43 billion investments to raise its power production to 56 GW from 35 GW.
APICORP however said several challenges and constraints face power investments in Mena states.