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Reference: Randa Alami, (2004). Financial aspects of Arab power development.Citable link to this page:


Financial aspects of Arab power development Subtitle: OIES paper: F9

Abstract: This study examines inter-linkages between the financing and development of Arab power sectors.These sectors are now operating in a difficult global financial market characterised by investors'retrenchment and risk aversion. This market has also moved away from the notion of a strugglebetween private and public finance, towards a strategy that emphasises the co-ordination of public,private, and multilateral players, to ensure successful delivery of services. Consequently, thecurrent modus operandi in funding power projects worldwide is 'hybrid forms of co-operation'.Recently, Arab power sectors have witnessed the entry of private sponsors and financiers, bothdomestic and foreign, as a result of two policy responses. Firstly, power sector regulations wereadjusted to allow private operators to participate in power generation. Secondly, the reform anddevelopment of Arab financial sectors allowed an expansion of participation by Arab banks, theuse of new instruments, and the entry of new players. Though the change is not overwhelmingquantitatively, it allowed private power to make a palpable contribution to the expansion of powergeneration capacity. Arab power infrastructure will also benefit from a number of intra-regionalpower pools and grid inter-connection projects, whose financing has been led by multilateralregional funds.Thus, there is a case for pursuing policies that build on the region’s strength and match the currentemphasis on resource pooling, namely: strengthening regional co-operation; maintaining flexibilityabout the range of sponsors allowed to operate; furthering financial development. Conversely,power sector financing should shift away from an emphasis on supply shortages, towardsmanaging demand and addressing operational and qualitative deficiencies. Similarly, sectoralreforms should be comprehensive enough to deal with underlying social and political dimensions.Given the embryonic state of regional reforms and of international experiences, financial problemswill neither be solved quickly nor by one-off measures of price correction or asset sale.

Publication status:PublishedPeer Review status:Reviewed (other)Version:Publisher's version

Bibliographic Details

Publisher: Oxford Institute for Energy Studies

Publisher Website:

Issue Date: 2004

Copyright Date: 2004 Identifiers

Isbn: 1-901-795-38-1

Urn: uuid:fa250a02-3cdd-4092-ba0a-56260de453ae Item Description

Type: Working/Discussion paper;

Language: en

Version: Publisher's versionKeywords: OIES clean development mechanism developing countries funding North Africa power infrastructure power sector development private finance privatisation public finance reform subsidies the Middle East Tiny URL: ora:10529


Author: Randa Alami - institutionUniversity of Oxford researchGroupOxford Institute for Energy Studies - - - - Bibliographic Details Publ



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