$150 billion bill for future GCC electricity needs
Arab Gulf states will have to build 100 gigawatts of power generation capacity before 2020, at a cost of $150 billion, to meet rapidly expanding demand for electricity, according to Vice Chairman of the World Energy Council, Hisham Khatib.
Addressing the Middle East Electricity Ministers' Summit, being held at the Dubai International Exhibition Centre (DIEC) alongside Middle East Electricity 2003 - the region's leading power generation and electricity industry exhibition - Khatib said regional power needs are growing faster than previously forecast, at three times the world average.
"In order to meet the huge demand for electricity, GCC countries will have to invest an average of billion every year, more than half of which, $4.5 billion, will have to be spent by Saudi Arabia alone," said Khatib.
Khatib said there was an urgent need for the region's governments to look at other ways to meet the cost of new energy projects, including accessing local stock markets and utilizing financial instruments, such as bonds.
"Self-financing, on its own, will not be enough to pay for expansion,” Khatib said. "Most Arab utilities collect less than half their bills. This is a financial disaster. Other sources of funding are needed."
He called on Arab governments to privatize electricity utilities, starting with the distribution networks. "This will improve the utilities' financial viability and give them the clout to collect their bills." Khatib also urged government's to end subsidies, saying energy tariffs should reflect the actual cost of electricity. "Subsidies divert resources from their optimal use. They lead to waste, over-use and mis-use," Khatib said.
The three-day Middle East Electricity Ministers' Summit has brought together government decision-makers, leading regional and international power companies and respected industry advisors, to discuss how new strategies and technologies can meet the region's burgeoning energy needs.
Organized by IIR, the Summit is being held alongside the first annual showing of Middle East Electricity . The event, that closes January 21, features over 600 exhibitors, from 34 countries and includes nine national pavilions from Germany, the UK, Switzerland, Italy, France, Turkey, Iran, Spain, and for the first time, Taiwan. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
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