Greenfield power and utility projects in MEA attract $8.7bln in investments in 2016 - report - Zawya Projects

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Greenfield power and utility projects in MEA attract $8.7bln in investments in 2016 - report

Greenfield power and utility projects in MEA attract $8.7bln in investments in 2016 - report Photo Credit:Reuters/Tiksa Negeri
Greater private sector participation throughout the power and utility value chain to create financing opportunities
14 March 2017

Greenfield activities dominated 2016 power and utility transactions in the Middle East and Africa region attracting $8.7 billion of investments, according to a new report.

According to EY’s Power Transactions and Trends: 2016 Review and 2017 Outlook report, key 2016 investments included the Kuwait Fund for Arab Economic Development’s debt financing of $115.5 million to set up a desalination plant in Egypt and investment of $924 million by a consortium of Islamic Development Bank, Natixis, National Bank of Abu Dhabi, and First Gulf Bank for the 800 MW Phase 3 of Mohammed bin Rashid Al Maktoum Solar Park in Dubai.

David Lloyd, Middle East Power and Utilities Transactions Leader, EY said the successful financial close of the clean coal Hassyan IPP and Mohammed bin Rashid Al Maktoum Solar PV Phase III in Dubai showed “the pace and scale by which successful projects are coming to market in the region.”

The focus in 2017 will be on Saudi renewable energy program and potential investment opportunities from the Saudi Electricity Company’s unbundling into four generation companies, he added.

The report identified energy subsidy reform as a top theme in the Middle East, giving examples of Oman’s introduction of cost-reflective tariffs for customers using more than 150 MWh annually, Kuwait’s plans to increase electricity and water tariffs for large consumers and Saudi plans to cut electricity and water subsidies by $53 billion by 2020.

According to the report, smart grids are also gaining traction in the region with the Bahrain Electricity and Water Authority signing up Siemens to modernize its grid infrastructure in November last year  and Qatar General Electricity and Water Corporation partnering with Belgian consultancy Elia Grid to develop smart grid expertise.

Lloyd said corporate or project finance opportunities are expected to increase as governments seek greater private sector participation throughout the power and utility value chain.

“Our current belief is that the nearer term opportunities lie at the production end of the value chain, in both power and water, although we do see potential opportunities in the medium term in transmission, distribution and even retail,” he said.

© Zawya Projects News 2017