Qatar to lead Middle East power rental market
Country to see strongest growth provided it hangs onto 2022 World Cup, report says.
The Middle East will witness the highest power rental market growth globally between 2014 and 2020, with its value doubling from $1.4bn to $2.8bn, according to a report by Global Data.
Qatar will lead the region, with its own power rental arena expanding at a CAGR of 18.5% from $225mn in 2014 to $622.2mn by 2020…. provided that it remains the 2022 FIFA World Cup host.
The United Arab Emirates (UAE) and Saudi Arabia will follow, with respective growth of 13.1% per year and 10.3% over the forecast period.
However, Siddhartha Raina, GlobalData’s Senior Analyst covering Power, says that Qatar’s exponential growth may be restrained if the country loses the chance to host the World Cup, following allegations of bribery in the bidding process and the subsequent resignation of FIFA president Sepp Blatter.
“With the World Cup planned for Qatar in 2022 and the 2020 World Expo in the UAE, significant investments have been made in these countries’ infrastructure development,” Raina says.
“These include Qatar’s investments of more than $200bn in developing its rail and highway network and ports, in turn boosting its power rental market.
“On the other hand, losing the World Cup could significantly impact the planned flow of such investments and government spending directed towards the country’s large-scale infrastructure development and construction sector, subsequently hindering the predicted growth in its power rental project revenues.”
The analyst adds that even if the World Cup proceeds in Qatar, several barriers will still hinder further growth in its power rental space by 2020, including stringent emission standards to help counter its environmental challenges.
“High efficiency and emission standards mean that Qatar’s power equipment rental market, which predominantly depends on diesel-powered generator sets, will face obstacles in terms of upgrading current equipment, resulting in added costs for owners,” Raina adds.