Independent Power Projects (IPP) and independent water and power projects (IWPP) will account for nearly 60% of regional energy production by 2015, according to management consultants Booz and Company.
Previously power projects have been exclusively financed by government and public operations, however IPPs and IWPPs create
The statement is based on a projection that IPPs will account for 34% of regional capacity, predominantly because of the “amortization of public expenditures, a competitive cost of power, predictable timing and often faster execution, the establishment of performance bench¬marks and the promotion of a favourable business environment,” the report stated.
"Current expansion plans will more than double the region’s IPP and IWPP capacity over the next five years, bringing the privately developed share of aggregate electricity generation to about 34 percent," said George Sarraf, Booz & Company partner.
The report recommends that changes to the additional buyer regulations, procurement and building buyout mechanisms should be adopted to facilitate their popularity.
The report concluded: “By making adjustments to the prevailing model, GCC govern¬ments will continue to be able to rely on private generation as a source of cost-competitive power and as a liberating alternative to the capital-intensive power projects of the past.”