Mena big source of low-cost green energy: Apicorp

Mena big source of low-cost green energy: Apicorp

The Mena region has emerged as a strong candidate for becoming a major blue and green hydrogen-exporting region due to the combination of low-cost gas resources and renewable energy, a report said.

Saudi Arabia and Morocco have already taken measurable steps to bolster their position as low-cost exporters of blue and green hydrogen, as well as net-zero ammonia and other low-carbon products, added the report Mena Power Investment Outlook 2020-2024 from the Arab Petroleum Investments Corporation (Apicorp), a multilateral development financial institution.

Another key trend noted by the report is the expected uptick in planned investments directed to power transmission and distribution projects in several countries over the next five years, driven by the rise of renewables and focus on boosting regional interconnectivity.

The role of the private sector and financing in the power sector however is still largely dependent on sector reforms and government guarantees. Typically, highly leveraged power projects in the region continue to be largely financed based on non-recourse or limited recourse structure with typical debt-equity (D/E) ratios in the 60:40 to 80:20 range, or even a 85:15 D/E ratio for lower risk projects backed by strong government payment guarantees. However, regulatory reforms to support renewables and the impact of