Amid a rapidly growing population and the increased spending on infrastructure, the Middle East and North Africa (MENA) region will need to spend US$250 billion on its power sector in the next five years to meet the growing electricity demand, said a report by the Arab Petroleum Investment Corporation published Monday.
According to the report, titled MENA Energy Investment Outlook: Capturing the Full Scope and Scale of the Power Sector, over the next five years, power capacity in the MENA region will increase by 7.8 percent, or 124 gigawatts, per annum.
The total amount of required capital investment covers power generation, transmission and distribution (GTD). "GTD accounts for more than 200 planned and announced energy-related projects in the MENA region valued between 100 million U.S. dollars and 20 billion U.S. dollars," said the APICORP report.
The MENA region has a total population of some 380 million people, with some of the countries' population growing at a rate of above 5 percent per annum.
The report added that countries in the Gulf Cooperation Council (GCC) will hold the lion's share of the investment growth. The GCC comprises the six Gulf Arab states -- the United Arab Emirates ( UAE), Saudi Arabia, Kuwait, Bahrain, Qatar and Oman, which account for 42 percent, or 105 billion dollars, of the total required expenditure in MENA.
The state of Iran alone will require 49 billion dollars, nearly 20 percent of the total value, of investment for power GTD by 2017.
The GCC total population stands at about 40 million people and grows by 3.2 percent annually, according to figures compiled by Qatar National Bank Capital.
In order to meet the growing demand for electricity, the UAE, whose total population has doubled to 8.5 million in the last eight years, stated to build four nuclear energy plants for 20 billion dollars. The first reactor is developed under the lead of Korea Electric Power and is set to deliver power energy since 2017.
Until 2030, the UAE, which currently relies 99 percent on oil and gas to satisfy its power needs, will have some 17 percent of its power coming from nuclear energy. Meanwhile, Saudi Arabia, Bahrain and Kuwait have also announced to develop nuclear energy.
Increasing the share of green energy is also on the agenda of most countries in MENA. "At least 10 solar power facilities worth a combined 6.8 billion U.S. dollars are currently under way in the UAE, Kuwait, Oman, Egypt, Jordan and Morocco," said the report.
At the World Energy Forum 2012, which was held from Oct. 22 to Oct. 24 in Dubai, Algerian Energy Minister Yousef Yousfi said the MENA region shall not fall for comforting illusions. "Fossil fuels will remain the dominant source of energy in MENA until 2050," he said. More than two-thirds of the world's known oil and gas reserves are located in the region.