The Libyan government hopes it can attract British companies to invest in its renewable energy projects, which would enable the country to exploit its solar and wind power for export to Europe.
A renewable energies bill, which sets out the regulations for the sector, is currently being considered by the parliament in Tripoli. Libya’s solar radiation levels in the desert and strong winds along its coast and mountains are among the world’s highest.
The divided country is also working on major reforms to its oil and gas institutions. In March, it launched its first oil and gas exploration licensing round in 18 years.
Masoud Sulaiman, chairman of the National Oil Corporation, announced this week that it will work with the British business intelligence and reporting firm Oxford Business Group (OBG) in its upcoming bidding rounds.
“The NOC is working to ensure that Libya’s energy sector is open, competitive and governed by clear rules. The upcoming bidding round represents a practical step towards sustainable growth and stronger partnerships with global investors,” he said. “Working with Oxford Business Group allows us to present these efforts through an independent and credible platform,” he added.
Oliver Cornock, OBG's global editor-in-chief, said efforts to reform Libya's institutions – which were fractured by civil war – gave investors the sense the country was “heading in the right direction”.
“There is unification and co-ordination around business policy,” he told The National, giving it further potential for supply-side investment. “The legacy of fragmentation and instability has been an impediment to foreign investors,” he said.
A delegation from the Renewable Energy Authority of Libya (REAOL) was in London last week to meet UK businesses for workshops about the proposed projects. Among the projects they will be seeking construction tenders for in the coming months are the 50 megawatt solar station in Bani Walid in western Libya, a 200MW solar power plant near Ghadames in the south-west, and a 200MW wind farm in Kufra, in the south-east.
This follows “successful” negotiations with Italy, Malta and Greece in which Libya is hopeful it could export up to 2 gigawatts of renewable energy to Europe, said Abdussalam Elansari, the chairman of REAOL. “It's not just a talk, Libya is open for genuine partnership. Those who engage early will shape the future energy of Libya,” he said.
Plans for battery and energy storage had not yet been drawn up as officials focused on getting the first stages of the projects off the ground.
Libya relies on oil exports, which make up 95 per cent of its revenue, but it also subsidises its fuel consumption within the country at great cost to the state while fuelling smuggling and terrorism. The move towards renewable energies for export is one measure to support reform and reduce “waste”.
But concerns were raised about the absence of real figures that could give more guarantees to international banks. “What it lacks is building up a framework, workable frameworks for the banks in order to participate more actively,” said Ghassan Atiga, who heads the Libya department at the Bahraini-owned ABC Bank.
“I've seen percentages. I've seen targets. I haven't seen much of numbers. How much will it cost for these investments to take place? I haven't seen how much of that could reduce waste,” he said. He pointed to attempts by Morocco to build renewable energy sea cables to sell power to the UK – plans for which were dropped earlier this year by the UK’s Energy Secretary, Ed Miliband.
Tarek Eltumi, a lawyer and founder of Eltumi Partners, which advises Libyan and international clients, said there was a “unique opportunity” to create an investment environment, that could be seen as an “empty slate”.
“Libyan law is quite well-established and stable by virtue of the fact that there hasn't been much developmental modernisation since the core principles were set in stone in the 1950s and 1960s,” he said.
“The absence of a complicated regulatory framework that comes with historical baggage and issues inherited from decades of practice or malpractice or previous regimes actually makes the landscape more attractive,” he said. But he warned that foreign investors would also be looking at other laws, such as those related to tax breaks, profits and exchange control.
It comes as the UK, US and nine other European and Arab states welcomed the Security Council’s decision to extend the UN’s political mandate in Libya, which seeks to unify the country.
“We affirm our commitment to support increased military and economic co-ordination between western and eastern Libyan stakeholders,” the grouping said. “We welcome Libyan efforts to integrate Libya’s security forces and urge Libyan leaders to take further steps to expand and institutionalise east-west military co-ordination and unification.”
The states welcomed Libya’s recent efforts to strengthen its economic institutions, including the National Oil Corporation and the Central Bank of Libya. “These steps have the potential to set Libya on a path towards more sustainable economic policy and greater prosperity,” they said in a statement.
