More private investments in Yemen [Archives:2002/31/Business & Economy]

YEMEN TIMES STAFF
Ministry of Electricitys working paper presented to the 2nd Oil and Gas conference on 24 June 2002, has opened a power-generating sector before private investments in response to meeting growing demand for this essential sector for economic development in the country.
Electricity resources reported that due to increased demand for electricity, the government adopted a policy of encouraging private investment in this sector. They added that investment in power production by power independent projects, build own operate and build own operate transfer has become an option. Government officials estimated the value of the short-run required investments to build new power-generating stations and expand the existing ones at YR. 500 million.
Mr. Mohammed Ashabi, director of the electricity department in the Ministry of electricity that private investments became an urgent question especially because 30% of the 18 million people in Yemen benefit from electricity. He added that The electricity network has the capacity of 1200 MEGAWATT while it consumes only 840 MEGAWATT and about 30% of its capacity is wasted due to its old installations. He made it clear that any new stations had not been built since 1986 whereas the annual demand for electricity was increasing at 7 to 10%. rate.
On the other hand, Countryside or villages are supplied with power by small diesel generators supplied by government or international donors like Japan, Germany, Holland and France. He declared that government subsidy on electricity prices rates can hinder the generating stations in the private sector which is looking for suitable prices.
According to industrial resources, the government provides electricity for the people and gain 8 rials per kilowatt hour amounting to half cost of production.
Mr. Ashabi said that reducing prices can be done if Gas has been used instead of Oil, which is cheaper than oil.
Mr. Adnan Mohammed Abdullah, Technical director for Yemen Gas company said that gas will probably be obtained from Mareb Gas field. He added that the field located in the middle of Yemen, contains about 2.10 Trillion {288 billion cubic m} verified reserves.
The world bank director in Sanaa said that prices could be reduced if there is a competition between different projects for producing electricity . He added that electricity sector is fundamental for the economic growth needed to fight poverty in Yemen.

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