Privatisation will bring radical change to the Middle East's power and water industry over the next two decades, as governments strive to meet year-on-year energy demand growth rates of six per cent, twice the world average, according to Allen Conroy, deputy managing director of Abu Dhabi's Umm Al Nar Power Company.

Conroy, who successfully completed the first privatisation of government assets in the UAE with the sale of Taweelah A1 Power Station to Gulf Total Tractebel Fina, said investment in power generation over the next 20 years was expected to top $8 billion per annum, much of it coming from the private sector.

"This represents five per cent of the Arab World GNP and 20 per cent of total recorded investment," said Conroy, who will be among 28 industry experts speaking in Dubai in January 2003 at the Middle East Electricity Exhibition and Conference.

The conference, to be held at the Dubai International Exhibition Centre, from January 19-21, will address the future of the region's power sector, focusing on fundamental issues affecting the industry.

Conroy will join other experts from the World Energy Council and the US, UK and the Middle East to address key questions including: regional investment requirements; energy restructuring and privatisation; deregulation of the energy market; subsidy issues and the development of price-driven customer tariffs; cogeneration and the potential of renewable energy in the region.

With over 20 years' experience in the Middle East's electricity and water industry, Conroy says regional peace, political stability and the right investment climate are critical if direct foreign investment is to be attracted to the Middle East's power sector.

"Governments have a vital role to play in restructuring and privatising the region's power and water industry by creating the pre-requisite environment and in consolidating public-private partnerships," said Conroy. "But first, they must be convinced that privatisation will provide the benefits claimed."

He added that privatisation would have political as well as economic dimensions. "Socio-economic factors in the region are changing the way individuals perceive power and water. Many are now realising that these utilities need to be treated as commercial commodities, rather than social benefits," he said.

"We are also aware of the prospects of the depletion of fossil fuels and the impact this will have on the region's businesses and economy. It is, therefore, incumbent on us to make the most of what we have. We need to utilise the remaining fuel stocks efficiently and effectively whilst still developing the economy."

Conroy says that as existing fossil fuel supplies disappear, Gulf states will be forced to find alternatives to sustain energy demands, including nuclear fuel. Another option would be linking the planned trans-Arabian national electricity grid to Europe's international grid.

The Middle East Electricity Exhibition and Conference - the region's premier event for the power generation and electricity industry - is being organised by the Institute for International Research (IIR).

"It is the only event of its kind in the Middle East, focusing on the key energy issues affecting the industry in the region," said Sarah Woodbridge, exhibitions director, Power and Energy Division, IIR Exhibitions.

"The conference will provide delegates with a unique opportunity to hear first hand from both developers and users on how new strategies and technologies are being applied to renew, improve and continuously expand the Middle East's power generation capacity."

To date, over 90 per cent of exhibitor space has been contracted at Middle East Electricity 2003. The first annual showing of the event will include national pavilions from Germany, the UK, Spain, Italy, Austria, Switzerland, Taiwan, and France and country groups from Turkey, Taiwan, Iran and South Africa.

Supported by the UAE Ministry of Electricity and Water and the Federal Electricity and Water Authority, Middle East Electricity 2003 will feature a dedicated Lighting Arena focusing on the industrial lighting sector and a dedicated area for new and renewable energy.