MIDDLE EAST
The Gulf Cooperation Council countries are in the process of finalizing plans for establishing a $1.7 billion power grid linking the six countries.
The first stage of the two-stage project, which will include interconnections between Saudi Arabia, Kuwait, Bahrain and Qatar, will be completed in 2002. The second stage, linking Oman and the United Arab Emirates (UAE), will be finished in 2007.
According to the UAE minister of water and electricity, a special authority will be established to run the Gulf power distribution system on a commercial basis. He also hinted at the possibility of extending the grid by interconnections with other Arab countries in the future.
According to industry sources, the demand for electricity in the Middle East is escalating beyond the capacity of the existing power suppliers and governments. These have traditionally held a monopoly of supply in the region and power has been heavily subsidised.
Some countries in the region cannot finance the construction of new power plants and their lack of funds will inevitably lead to power shortages. For others, demand is growing so rapidly that without help from the private sector in the construction of new plants, demand will also outstrip supply.
Many Middle East countries are in the process of removing subsidies in order to comply with membership of the World Trade Organization and to improve their economies. Until subsidies are removed, it will be impossible for an effective market to be established in which private sector power generators can operate.
The Arab countries to the north of the Gulf are also building an interconnected system, but the establishment of the latest stage, a link between Jordan and Egypt, has been postponed until June 1998 as a result of technical difficulties.
A cable running under the Red Sea has been damaged by the collapse of a coral reef. The cable is 13 km long, and has cost $72 million. A 600 m section has been damaged.
The Jordan-Egypt link is part of a scheme to interconnect Jordan, Egypt, Syria, Iraq and Turkey. The complete set of interconnections is due to be finished in 2002.
Work is also underway to interconnect the north African states of Egypt, Libya, Tunisia, Algeria and Morocco. This regional project is being financed by the Arab Fund for Economic and Social Development.