Kuwait’s Projects Market
The project market in Kuwait ranked third in the Gulf with a value of $202 billion during Aug-Sep period. Projections for the country’s real GDP growth rate in 2022 have risen as high as 8.5% as domestic demand strengthens post-Covid-19.
The Arab state will benefit throughout 2022 from the increased oil production quantities and relatively higher oil and gas prices in international markets. With its predominant dependence on energy exports, Kuwait is said to have an added advantage. Oil sector accounts for 40% of GDP, 70% of export revenues, and 90% of government income.
A recent government report revealed about 129 projects are included in the 2022/2023 development plan, while the value of their financial appropriations is about KD 1.3 billion. Currently, the country has about $200bn of projects planned or underway. Over $8bn projects are in execution stage in the oil & gas, petrochemicals, and power and water sectors, whereas close to $57bn projects are in pre-execution stage.
State-owned Kuwait Oil Company is seeking to ramp up natural gas production in line with Kuwait Petroleum Corporation's strategy to meet the domestic demand for energy. The Gulf state, which currently produces 650 million cubic feet of gas per day, plans to increase it to 1 billion.
The state’s downstream investment arm ‘Kuwait National Petroleum Company’ plans to pump nearly $4.2 billion into new projects as part of its long-term development strategy until 2040. New projects will lift the country’s domestic crude refining output to 1.6 million barrels per day by 2025, increase gas production and ensure greater local private sector participation in the hydrocarbon projects.
Post-Covid, Kuwait’s highest priority is to accelerate its Vision 2035 diversification and structural economic reform programme aimed at bringing private investment and new job-creating industries into the country.
Kuwait Authority for Partnership Projects (KAPP) is moving ahead with its programme of PPP projects. It is making progress in tendering its next independent water and power projects.
The project spending was slumped due to the pandemic and low oil prices. Also, political complications and bureaucratic hurdles in the country have prevented progress in the past. However, the situation is now expected to stabilize in the coming years.