BMI View: Recent blackouts across Kuwait have drawn attention to the significant challenges that theKuwaiti power sector is facing in the years ahead. With power generation struggling to keep up withgrowing demand, much greater levels of investment are urgently needed. However, with the sector almostwholly state-owned and operated, and a highly restrictive regulatory environment, attracting majorinvestment is difficult.
Significant changes are on the cards in the Kuwaiti power sector over the coming years, as the governmentattempts to spur investment into the country's ageing infrastructure. Kuwait's first public-private partnership(PPP) for the construction of the 1.5GW Al-Zour power and desalination plant has the potential to set aprecedent for greater private sector engagement within Kuwait's infrastructure and power industries, whileat the same time, the government is attempting to scale back its generous regime of energy subsidies, whichhave led to overconsumption and waste.