The six Gulf Cooperation Council (GCC) members are reported to be planning to invest over $58bn in expanding their power generation capacity to meet the fast growing domestic demand.

The latest report by the Arab Petroleum Investment Corporation (APICORP) said that between 2012 and 2016, it expects approximately 55 GW of generation capacity to be added in the GCC, the fastest growing area in the Middle East and North Africa.

APICORP said that as a result of high population growth, record levels of urbanization, sustained economic growth and pressing needs for air conditioning and seawater desalination, many countries in the region have been struggling to meet demand.

It said: “Power generation capacity is projected to continue growing at a rate of 8.5 per cent per year during the period 2012-2016.

“The cost of an average energy project is expected to increase, partly because the global credit crisis has forced an up-pricing of risk, and we expect project risk premiums to remain relatively high.”

For more Market Intelligence.