Energy Transition: strategic investment and deal opportunities

Introduction

The Middle East is undergoing a remarkable energy transition. It is being driven by a growing awareness around the region’s vulnerability to climate change, need for economic and energy diversification, global demand for clean energy and the positive social impact of sustainable practices.

To meet regional governments’ goals to move towards cleaner and more sustainable energy sources, we anticipate further significant investments in solar, wind and energy storage projects to reduce dependency on fossil fuels and capitalise on the region's abundant renewable resources. This clean energy generation, along with carbon capture and storage, will be the bedrock of new domestic and export economic opportunities to enable the region to continue to thrive.

Extensive investments across the region in clean energy generation projects could boost the regional economy to $13 trillion by 2050. We see significant opportunities in green fuels, such as hydrogen (investments required to meet export demand for clean hydrogen in 2050 at around US$2.1tn.) and manufacturing of green steel. The region also has over $2 trillion of planned infrastructure projects, which generate opportunities in sustainable destinations, influence global supply chains and generate a circular economy.

Strategic dealmaking

The transition to a greener future in the Middle East is underpinned by strategic dealmaking in key areas such as renewable energy projects, green hydrogen production, associated infrastructure development, carbon capture and utilization and, importantly, localisation of industry for the long term benefit of the region.

The scale, timetable and complexity of these investments is globally unprecedented. The ambition requires moving from standalone assets to major and integrated gigascale energy transition projects, which incorporate multi hypen technologies and multi hypen revenue streams. Success will be defined by deploying innovative greenfield development, third party financing, procurement and capital recycling approaches. Looking at it through a combined equity, debt and engineering lens ensures that projects are delivered with sustainable outcomes.

How we support organisations on their energy transition journey

Our dedicated Energy Transition team has key industry, sector and service experts with diverse global expertise. We bring a solver mindset that incorporates various advisory disciplines to assist clients through the complexities of this transformative energy transition, anticipating challenges and unlocking potential throughout the entire project lifecycle.

Our focus is on creating and preserving value, collaborating with clients to address their specific decarbonisation and renewable energy needs, while navigating the complex and multi-faceted sustainability challenges that arise.

Co-development:

We work side by side with our clients to co-develop greenfield energy transition projects from initial strategy and business case through to financial close and into construction and operation. We see ourselves as your partner on the entire journey. Our core team has deep experience and expertise in bringing projects to financial close and will guide the development and structuring to ensure the project can be third party financed or partially or fully sold to maximize value. We will bring the best of our global PwC team to achieve a best for project outcome, bringing our regional and global lessons learnt from co-developing greenfield energy transition projects across the world along with market benchmarking to ensure the requirements of future potential equity investors and debt financiers are met.

Capital raising and capital recycling:

We work with clients to help raise debt, raise equity or find the right strategic partner. We leverage our deep sector experience and expertise to appropriately develop and position the project to maximise outcomes for our clients. We have extensive regional and global experience in raising venture/development capital, commercial debt, leveraging export credit agency finance and selling down partial or full equity stakes for greenfield and brownfield projects.

Advisory:

We provide evidence and experience backed advice to help design solutions to solve emerging challenges for the energy transition. This advice often includes supporting the selection of appropriate joint venture partners, the upfront development of project and deal strategy, market design including bankability review, portfolio asset reviews, implementation of our bespoke GenAI tools and end to end support throughout the construction and operation phases following financial close.

Investing in energy transition projects

The transition to low-carbon, climate resilient infrastructure assets is complex. It requires agile project planning and management within a changing regulatory environment. Drawing on our market-leading expertise and experience, our Energy Transition team has compiled a Our Energy Transition team has compiled papers best practice financial, commercial and legal guidance for investing in greenfield energy transition projects.

How to navigate this page

Made up of 25+ papers, this page is dedicated to different aspects of the development, funding, procurement, contracting, delivery and operation phase strategies of energy transition projects.

The papers provide deep analyses into the issues and risks associated with large-scale, complex and potentially interfacing greenfield projects, including:

The rise of giga-scale energy transition projects: Key bankability and investment issues
How to identify, analyse and mitigate risk
Delivery models, strategies, plans and interface management
Key levers for maximising value: development, procurement, contracting and delivery phase strategies
Commissioning and performance testing risks pre-completion and operational risks post-completion