As political unrest envelops the Middle East, the task of attracting foreign investors to the region will certainly become more difficult. For the moment, it is the Levant that is suffering the most, with the impact of a bloody war in Syria spilling over into Lebanon and Jordan, which is itself having to cope with homegrown political dissent.
For investors looking to markets outside the highly indebted and financially challenged eurozone and the US, the Middle East should, ideally, offer a sound alternative investment destination. But most do not, except for a few countries in the Gulf Co-operation Council (GCC), notably Oman, Qatar and Saudi Arabia, along with Dubai in the United Arab Emirates, according to the third Middle East Asset Management survey undertaken on behalf of the Qatar Financial Centre Authority. The survey also shows that “investors worry about Lebanon and Jordan, and to a lesser extent Kuwait, as political unrest waxes and wanes across the region”.
Despite this, the solar sector continues to attract investors, especially in Saudi Arabia, which is predicting 41 gigawatts of installed capacity in 2032, recent reports show. Companies that are considering expanding in the country include German photovoltaic firm Conergy, distributor of stainless steel fasteners Wagener & Simon WASI, Italian developer of solar concentrating collectors Soltigua and London-based energy company Eoxis, according to mergermarket.
Recently, Dubai came up with a solar plan to stall 1 gigawatt of capacity, which has kicked off with an initial project of 10 megawatts, according to the president of the Emirates Solar Industry Association, Vahid Fotuhi.
He explains that by unveiling the programme when the global solar market is suffering from a supply glut and prices are at an all-time low, Dubai should be able to attract a lot of investor interest, thus minimising the subsidy it will have to pay to offset the difference between solar power and the conventional cost of electricity.
Lucia Dore is the head of GCC and Middle East at mergermarket, part of The Financial Times Group. E-mail: firstname.lastname@example.org