The Arab Petroleum Investments Corporation (APICORP) estimates the overall planned and committed investments in the Middle East and North Africa (MENA) region to exceed $805 billion over the next five years, a $13 billion increase from its 2020 five-year outlook.
In its MENA Energy Investment Outlook 2021-2025, APICORP attributed this modest rise to four factors, namely the strong confidence in the rebound of global GDP, rising energy demand, the comeback of Libyan projects – which alone account for around $10 billion in planned projects – and the accelerated pace of renewables in the region.
According to current estimates, MENA will add three GW of installed solar power capacity in 2021 alone – double that of 2020 – and 20 GW over the next five years.
The region’s economic forecasts suggest that commodity prices and exports will drive the rebound expected for most MENA countries in 2021.
However, economies remain under fiscal strains due to unprecedented high debt levels and decline in oil prices, tourism/Hajj revenues and personal remittances.
APICORD CEO Dr. Ahmed Ali Attiga said the report indicates that energy industries are entering a period of relative stability in terms of investments as most MENA countries return to GDP growth in 2021 and the energy transition showing no signs of slowing down.
“We anticipate a slow but steady recovery of the energy sector from the fallout of the COVID-19 pandemic, supported by continued investment from the public sector and an upswing in demand.”
Committed gas investments in MENA for the period 2021-2025 are expected to total $75 billion, $9.5 billion less than the previous outlook.
The decline is attributed to the completion of several megaprojects in 2020 and countries being more cautious to new project commitments in an era of gas overcapacity.
Saudi Arabia, Iraq and Qatar are the top three MENA countries in terms of committed gas investments.
This is owed to Qatar’s North Field East megaproject, Saudi Arabia’s gas-to-power drive and the massive Jafurah unconventional gas development – which is poised to make the kingdom a global blue hydrogen exporter – and Iraq’s gas-to-power projects and determination to cut flaring and greenhouse gas emissions.
Meanwhile, planned investments held relatively steady at $133 billion for 2021-2025, signaling the region’s willingness to resume its natural gas capacity build-up – particularly the ambitious unconventional gas developments in Saudi Arabia, UAE, Oman, and Algeria – once macro conditions improve.