Prioritizing renewable energy in a time of fiscal austerity
Meeting stated targets to boost renewable energy in countries belonging to the Gulf Cooperation Council (GCC) presents multiple challenges, with attracting sufficient financing being a primary concern. With government budgets already constrained by low oil revenues, and electricity demand projected to grow rapidly, states will no longer be able to shoulder the full cost of building new capacity and continuing to supply electricity at substantially subsidized prices.
This chapter explores mechanisms by which GCC governments can secure private investment, including foreign direct investment (FDI), acknowledging specific challenges that arise from Islamic finance and identifying obstacles in policy that will need to be addressed. It also highlights steps some countries have taken, which demonstrate that investors are interested in the region.