Arab Region Renewable Energy Soars
According to the Arab Petroleum Investments Corporation (Apicorp), strong government support has given rise to the steady momentum of renewable energy developments in the Arab world. As noted in its Mena annual energy investments outlook for the year, these enhancements are due to the attractive declining costs of solar PV, as well as the increasing demand for energy.
Thanks to the financial support of multilateral development banks (MDBs) and development agencies, energy diversification is slowly becoming a fully realized reality. This urgency is also fuelled by disturbing environmental concerns, shortages on gas, and an impressive cost-effectiveness of renewable energy. This kind of power generation source is lucrative enough to turn governments away from relying on high-value liquids too much.
In line with this, Arab countries have begun implementing sustainable actions and programmes such as tax exemptions, competitive bidding, power-purchase agreements (PPA), feed in tariffs (FiTs), financial incentives, and land incentives. Close to $350bn could be invested in the Mena’s power sector as estimated by Apicorp in the next five years, with a whopping 34% as accounted for by renewable energy.
With an impressive goal of having 42% renewable energy share in total energy generation by 2020, Morocco and its ambitious vision is just one country among many to prioritize renewable initiatives in the region. The Noor-Ouarzazate project boasts of an estimated capacity of 580MW and is responsible for 35% of country’s energy requirements. It is impressively the largest Concentrated Solar Power (CSP) complex in the world. On the other hand, Tunisia also values renewable energy generation as it recently licensed four European firms (ABO WIND AG, UPC Tunisia Renewables, LUCIA HOLDING, and VSB Energies Nouvelles) to produce 120MW from wind. The country’s goal is to have renewable energy account for 12% of total energy generation by 2020, and 30% by 2030.
Of course, these efforts can only be made possible by highly engaged private sectors and invested foreign countries, especially for financially challenged states. With the involvement of MDBs and development institutions and their willingness to enter riskier markets, these initiatives can be financed, such as in Morocco’s support from the European Investment Bank and KfW. The same can be said for the IFC in Jordan, where business environments are encouraged to flourish in order to attract better foreign investments.
A strong relationship and steady cooperation between private sectors and government institutions is key to sustaining this crucial initiative to further boost renewable energy projects. This, coupled with good foreign relations, will pave the way for the future of funding grid reinforcements, storage technologies, and other renewable energy requirements.
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