Foreword

Nimer AbuAli Cleantech Director — EY Middle East and North Africa

Thomas Christiansen Associate Director — EY Europe, Middle East and North Africa

We are pleased to present our fourth Middle East and North Africa Cleantech Survey Report in collaboration with the Clean Energy Business Council (CEBC) and the Middle East Solar Industry Association (MESIA). Based on the key findings from our 2014 cleantech survey, the report provides a comprehensive assessment of the cleantech market in the Middle East and North Africa (MENA) Region.

The report builds on our Renewable Energy Country Attractiveness Index (RECAI), published quarterly since 2003, which ranks 40 countries across the globe on cleantech developments. RECAI takes into account the vast potential and strong commitment of regional governments to tap cleantech opportunities and has confirmed the year-on-year rise of the cleantech sector in Morocco and Saudi Arabia.

According to the International Energy Agency (IEA), global renewable energy capacity expanded at its fastest pace in 2013, with generation reaching almost 22% higher than the global newly installed generation capacity; it is now on par with that of natural gas. Investment in new renewable capacity topped US$250 billion in 2013 and is very likely to grow further.

Cleantech makes up only a small share of the total power generation in the MENA Region, which is dominated by conventional energy sources. However, opportunities to provide affordable and secure low-carbon energy are continuously expanding and, going forward, industry executives expect a rapid growth in the cleantech contribution.

Cleantech growth is essential if we are to serve the energy needs of the 321 million people in the Region, with an average population growth rate of 1.9% per annum over the last few years. Fuelled by the population boom, investments in infrastructure and growth of energy-intensive industries such as petrochemicals, energy consumption in the MENA Region is expected to increase by 81% from 2010 to 2050. The energy subsidy bill for MENA governments is also expected to grow accordingly if no further steps are taken to reduce subsidies. The IEA estimates that energy subsidies in the MENA Region stood at about US$178 billion in 2013, which is 34% of global energy subsidies. International economic and energy agencies have called for a reduction in government subsidies, a key factor standing in the way of cleantech’s rapid growth.

The MENA Region is favorably positioned as an enabler of cleantech with excellent solar, wind and ocean resources and abundant space for large renewable projects. As government commitments to renewable energy grow and new financing sources and innovative financing structures emerge, the MENA Region can become one of the fastest cleantech growth markets in the years ahead.