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Web Exclusive | April 2017

Saudi Arabia diesel genset rental market to grow at 3.7 per cent CAGR – 6Wresearch

Increasing construction activities, expansion of public infrastructures, government policies to support establishment of new industries and need to supply power in off-grid and remote areas are the key factors that have spurred the diesel genset rental market in Saudi Arabia. However, the market has declined by almost 60 per cent during 2015 and 2016 owing to slump in construction industry as a result of budget deficit due to low crude oil prices. According to 6Wresearch, Saudi Arabia diesel genset rental market is forecast to grow at a CAGR of 3.7 per cent during 2017-22. Low investment in construction sector due to declined government spending during 2015-16 impacted the growth of diesel genset rental market in Saudi Arabia. The market is anticipated to remain affected until the oil prices are recovered. However, with changing government policies to generate major portion of its revenues from non-oil sector would drive the growth of diesel genset rental market in Saudi Arabia.

According to Rajat Kharbanda, Senior Consultant, Research and Consulting, 6Wresearch, “Medium to high rating diesel gensets have dominated the rental market in 2016, owing to high demand from utilities and oil & gas sector. Diesel gensets are the prime source of power backup in utilities due to readily availability and ease of storage of diesel unlike natural gas. However, the share is expected to decline over the next five years due to expansion of electricity grid and integration of renewable energy.” According to Ravi Bhandari, Assistant Manager, Research and Consulting, 6Wresearch, “Around 50 players are operating in the market, with 5-8 players operating on turnkey power plant business model, which are also the leading players in the market. Rest provide diesel gensets on rent as a single unit and have fleet size of 30-40 units, which have also increased the competition in the market.”

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