Middle-East and Africa Diesel Generator Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Middle-East and Africa Diesel Generator Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Middle-East and African diesel generator market is expected to record a CAGR of more than 2.1% throughout 2022-2027. The outbreak of COVID-19 in Q1 of 2020 negatively impacted the market. Lockdown restrictions imposed by governments in the region have brought countless unexpected variables with an extended effect on projects’ life cycles, including manufacturing, testing, and supply chain. Moreover, the fabrication and delivery schedules were complicated due to COVID-19 pandemic-related restrictions, which impacted the availability of staff and materials. Factors such as increased demand for uninterrupted and reliable power supply coupled with increasing construction activities are expected to drive the market. However, advancements in battery technologies and the availability of much cleaner alternatives may restrain the market.

· The backup generator segment is expected to hold the largest market share as most countries in the region, especially the sub-Saharan countries, lack quality transmission, which leads to citizens owning their generators and using them when required.

· New models like modestly sized power stations, which comprise dependable diesel-powered engines, alongside quality alternator and transformer technologies, may provide a new source of energy production for previously underserved communities and act as an opportunity for market players.

· Nigeria is expected to dominate the market due to its large population and increasing economic growth. Electricity demand is expected to rise with the increase in the size of its population.

Key Market TrendsBackup Generator Segment to Dominate the Market

· Several countries in Africa, especially western Africa, heavily rely upon the use of small capacity generators to meet the daily usage of electricity. This is primarily due to the demand for uninterrupted and reliable power supply, which the utility grid cannot provide.

· The transmission network and reliability of the utility grid may directly correlate with the power generated by backup generators. North Africa, which has higher access to the grid, has lower backup generators than the Sub-Saharan countries.

· Around 597 million people in 2021 in sub-Saharan Africa did not have access to electricity, which is expected to be the primary driver for the growth of the backup generators sub-segment during the forecast period.

· According to the World Bank, in 2020, only 1.6 million people had access to electricity out of 10 million households in the Democratic Republic of Congo. Consequently, the Democratic Republic of Congo has higher electricity generation from its diesel backup generators than Egypt.

· Most countries in the region engaged in oil and gas production tend to use diesel and gasoline generators more to produce electricity. These generators provide key power sources for the oil and gas industry, mainly to assist with drilling. Much power is needed at remote locations to provide service to heavy equipment used in drilling operations

· Therefore, backup diesel generators are expected to continue to dominate the market due to their flexible use and large size for electricity generation compared to other market segments.

Nigeria to Dominate the Market

· Nigeria is among the highest consumers of energy generated by backup generators in the region. This is due to several factors, including easy availability of fossil fuel, poor governmental policies leading to low transmission capabilities, and an increasing population that is leading to an increase in electricity demand. These factors are pushing consumers to produce their electricity using small backup generators, thereby aiding the market's growth.

· In 2020, 80.1 million people didn't have access to electricity. Thus, the country heavily relies upon small capacity generators to meet daily electricity usage.

· The country is a large user of small-scale generators. It mainly relies heavily on diesel and gasoline as primary fuels. Problems with the transmission of electricity are a significant driver of the market.

· Moreover, the country is looking to increase its annual per capita power consumption by 6.5 times over the coming years, from 151 kWh in 2015 to 982 kWh per capita by 2025, which is expected to have a positive impact on the market studied.

· Also, Nigeria is looking to increase its manufacturing output to 20% of GDP by 2025, which will drive market growth as diesel generators provide backup power to keep commercial and manufacturing businesses running in the event of an accidental power cut.

· Hence, Nigeria is expected to dominate the market due to its large population and low transmission capabilities, which is expected to boost the demand for diesel generators in the country.

Competitive Landscape

The Middle-East and African diesel generator market is partially fragmented. Some of the key players in this market are Caterpillar Inc., Cummins Ltd, Yanmar Holdings Co. Ltd, Atlas Copco AB, and Honda Siel Power Products Limited, among others.

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