Mumbai, Maharashtra, India, Tuesday, February 28, 2006 — (Business Wire
India) — Strong economic growth, youthful demographics and
diversification away from oil are underlining the escalating demand for
power in the Middle East and North Africa (MENA). As power generation
markets expand to meet the increasing need for power, the steam and gas
turbines markets in the region should receive a resultant fillip. Economic
liberalisation and privatisation initiatives are set to further reinforce
such positive trends.

Frost & Sullivan (http://power.frost.com) finds that the Middle East and
North Africa Steam and Gas Turbines Markets are set to expand from $2.53
billion in 2005 to $3.25 billion in 2011. Of the total MW addition of
100,409 MW over the period 2005-2011, gas turbines are expected to account
for 77.1 per cent, with steam turbines capturing the remainder. In terms
of the total revenue addition of $20,738.6 million during this period, gas
turbines are projected to contribute 87.2 per cent, with the remainder
accounted for by steam turbines.

Soaring demand for electricity =96 estimated to be growing as high as 8-9
per cent annually in some countries =96 is providing major impetus to the
MENA steam and gas turbines markets. The residential sector (with an
expanding population and youthful demography) as well as the booming
hydrocarbon and industrial sector are contributing to an increase in
demand for power. This trend, together with overall regional economic
growth due to booming oil prices and increased oil production quotas, is
set to push market expansion.

While augmented revenues due to economic growth could lead to higher
investments to the power generation market, it will, still be insufficient
to meet the investments required to meet domestic demand. This is poised
to create opportunities for private investors to build installed power
capacities in the region. In this context, the United Arab Emirates (UAE)
and Saudi Arabia have been frontrunners in maximising the benefits of
private investment, followed by Qatar and Egypt.

“As privatisation is seen as the potential method of building national
infrastructure, governments are liberalising their economies and are
increasingly seeking to attract investments from other sources; however,
existing policies and procedures are making the situation less
attractive,” notes Frost & Sullivan Research Analyst Karthikeyan
Vadamalairaaj.

An unfavourable investment climate, including the lack of clear legal
frameworks and regulations in some countries, is indeed retarding progress
in attracting private capital. At the same time, highly subsidised
electricity systems with distorted contract structures and tariff rates
are lowering the difference between operating costs and actual revenue
generation. This situation is discouraging potential private investors for
whom ROI is crucial.

“Since a majority of upcoming power plants are expected to be built by
private investors, strategic collaborations with prospective bidders by
original equipment manufacturers on all occasions is essential to tap
growth potential,” says Vadamalairaaj. “This will also pave the way for a
competitive contract-awarding process by ensuring that there is a check on
pricing.”

Gas turbines are likely to dominate the market until 2011, as the
resources of the region will complement its power generation needs. Steam
turbines are anticipated to have a consistent share with gas turbines, due
to the combined cycle power generation facility.

The majority of power requirements are expected to come from higher output
categories. The 80-180 MW and above 300 MW output segments, of gas and
steam turbines respectively, are likely to occupy the highest share of
capacity additions due to the growing popularity of combined cycle power
generation. Machines providing better output efficiency and lower
emissions are set to become increasingly popular in the market.

Iran, Saudi Arabia and the UAE are among the key countries in the MENA
that are likely to witness high activity over the long term. Iraq and the
smaller Gulf states will collectively register the highest capacity
addition in the region. The market is not expected to be concentrated over
a specific region, but spread relatively evenly, with all the countries
having a considerable share.

Middle East and North Africa Steam and Gas Turbines Markets, part of the
9851 Subscription, provides an overview and outlook for the market. This
study has been segmented into steam turbines market and gas turbines
market. All research included in subscriptions provide detailed market
opportunities and industry trends. All research is evaluated following
extensive interviews with market participants. Interviews are available
to the press.