MENA energy investments are set to hit USD 879 billion by 2026, according to a report by Apicorp. Saudi Arabia, Iraq, Egypt and the UAE will lead the way.
According to a report by the Arab Investment Corporation, Apicorp, an energy-focused financial institution, energy investments over the next five years are set to grow by 9% to each USD 879 billion as exporters boost spending on the back of higher oil revenues.
Widespread investment in MENA energy sectors
Committed projects, those in the execution phase, account for USD 352 billion, with planned projects representing USD 527 billion of the total. Saudi Arabia will lead the region in terms of investments, followed by Iraq, Egypt and the UAE, according to the report. The investments will span a number of sectors, including power, petrochemicals and oil and gas.
Gulf states are expected to generate up to USD 1.4 trillion in additional revenue thanks to rising oil prices, according to the International Monetary Fund. Oil prices rose by 67% across 2021 and are still up 60% on last year due to concerns over the ongoing Russia-Ukraine conflict.
The rise of green energy
States across the region are expected to add 5.6 gigawatts of installed capacity from renewables in 2022, up from the 3 gigawatts that came online in 2021, according to the report. By 2026, this figure is expected to rise to 33 gigawatts. Morocco are Jordan are leading the way in terms of green power, with the former aiming to generate 52% of its needs by 2025.
The UAE aims to become carbon neutral by 2050, with clean and renewable energy investments worth USD 163.5 billion planned over the next three decades. Projects include the building of the world’s largest solar plant at Al Dhafra and the creation of the Mohammed bin Rashid Solar Park, which is expected to generate 5,000 megawatts of power.
Gas to grow, oil-fired power to fall
By 2024, natural gas is expected to grow to a share of approximately 70-75% of power generation across the MENA region, whereas oil-fired power generation will fall from approximately 24% of the regional total to 20%, according to the report.
Blue and green hydrogen investments
According to Apicorp, blue and green hydrogen production will account for the majority of emerging hydrogen markets over the period in the MENA region. The UAE is currently focused on improving its hydrogen production in order to position itself as an exporter and is seeking to capture 25% of the global market. The issuance of green and sustainable bonds in the MENA region in 2021 increased by over 300% to reach USD 18.64, according to the report.