According to new research from Northeast Group, LLC, Eurasian countries will invest $18.3 billion in modernizing their electric grid over the next decade.
The region has strong business case for smart grid investment, a number of experienced vendors and significant funding available from multilateral lending organizations. Northeast Group predicts that near-term growth will be focused in Central Asian countries currently battling high electricity losses while larger countries such as Russia will develop in the medium term.
"The case for smart grid investment in Eurasia is compelling. Eurasian countries are among the least energy efficient in the world and have some of the highest electricity distribution loss rates," said Ben Gardner, president of Northeast Group. "Smart grid will be instrumental in improving the efficiency of the electricity sector in these countries. Available multilateral financing will help kick start deployments in the near term."
Since 2011, the World Bank and Asian Development Bank have committed $380 million for smart grid investments in Uzbekistan while several other Eurasian countries with similar electricity sector characteristics could see financing become available if these deployments are successful.
"The current political challenges in Russia and Ukraine limit the short-term market potential of some of the region's largest countries," said Gardner. "But recent events do not change the core drivers and potential benefits, which should lead to strong medium-term growth. International vendors will be looking to partner with established local vendors and to participate in near-term Central Asian projects to position themselves for significant medium-term opportunities in the larger markets of the region."
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