MENA energy investments to surge despite oil price plunge
Oil prices have plunged in recent months, leading to numerous speculations about the impact of this decline on investments in the Middle East’s energy sector.
However, there is no consensus about whether the effects will be positive or negative. In fact, there may be little to no impact on investments into the region’s energy sector.
As the Middle East region looks to gain an additional power generation capacity of nearly 267 GW by 2030, a dip in oil prices is not going to deter the spirit of ongoing energy investments.
The sub-section of green energy in the region has seen huge impetus as far as investments are concerned. The MENA region is focusing on a healthy energy mix, which is drawing investments from both public and private players.
The region is targeting an investment of more than $670 billion in the renewable energy sector in next 25 years. This amount is more than eight percent of the global spending in the sector, thereby indicating a positive wave of investments in the energy sector despite the hard times.
In fact, predictions point towards a rise in energy investments in 2017, given the fact that 2016 saw one of the lowest points in the past 12 years in terms of oil price and trading.
Energy experts believe the situation cannot plummet further and that the sector will only continue to grow, widening the scope for a better investment-return ratio.
Notably, German conglomerate Siemens has recently signed a QAR45.2 million ($12.4 million) contract to facilitate the powering up of Qatar’s new Hamad Port, a megaproject with a considerable energy management package.
The technology giant is also working on improving Egypt’s power generation capacity by nearly 50 percent until 2018 by adding a total of 16.4 GW with its mega project.
Apart from conventional energy sources such as oil and gas, sprucing up the energy infrastructure by adding more renewable resources is of utmost importance to the region to offset the effects of declining oil prices.