INVESTMENT in Middle East power projects is booming this year as governments race to install new generating capacity. Due to an explosion of domestic and industrial demand regional utility companies now face the need to increase supply by rates of up to 15 per cent a year. Power cuts can occur at periods of peak demand, highlighting the parallel need to improve transmission and distribution networks to cope with the growing pressures.
MEED estimates that 15 states in the region could spend nearly $78,000 million before the end of the century on new power projects. If all the proposals are implemented generating capacity could rise by 70 per cent by 2000. Capacity additions of 68,000 MW are now planned and more proposals can be expected. Current capacity is just short of 100,000 MW. Pakistan, Iran, Saudi Arabia and Egypt will see the largest additions to capacity. Huge investments are also planned in the smaller GCC states where the per capita increases will be even greater.
The striking development of the past year has been the growing interest in private initiatives in a sector traditionally dominated by the state. Pakistan has been the test bed and the pioneering Hub river project is now under way. The authorities announced a new tariff formula earlier this year and a flood of other private proposals has resulted. Budget pressures are also forcing the Gulf states to look at private-sector options; Oman’s Manah project is moving ahead and Bahrain could give the go-ahead to a private power and water scheme later this year.