Renewable energy in Bahrain

Publication | January 2011


Bahrain and the States of the Gulf Cooperation Council (“GCC”) enjoy some of the highest solar radiation levels in the world and, despite moderate wind speeds, wind is another possible source of renewable energy. Bahrain is looking to renewable energy to increase the production of electricity and reduce pollution emitted from power plants operating with natural gas and diesel fuel and, to this end, recently announced plans to expand the country’s power generation capacity by using a mix of solar and wind energy.


Bahrain produces 2800 MW of electricity and 140 million gallons per delay of desalinated water using fossil fuel as the main energy source. However, an estimated population growth rate of 10 per cent per annum means the amount of natural gas required to meet Bahrain’s energy needs will double in 10 years.

The development of renewable energy is at an early stage in Bahrain (as in the rest of the GCC), though some street lighting is currently powered by solar charged batteries. In 2005, the Electricity and Water Authority established a committee to study solar and wind energy and measure the potential of these sources. The study is currently being undertaken at a number of meteorological stations across Bahrain. In 2009, a consultation committee was established with a view to establishing a solar and wind hybrid pilot project with a capacity of between 3 and 5 MW. It is understood that technical consultants will be appointed for this project imminently.


Major Projects

Bahrain Wind IPP (Wind, Renewables)

Bahrain is in the early stages of planning its first wind farm, with the project likely to be put out to tender as an Independent Power Project (“IPP”). The National Oil and Gas Authority (“NOGA”) has announced that Bahrain is to set up a wind energy plant to produce electricity. According to NOGA, a Japanese company that had concluded tests on wind velocity in Bahrain was due to submit the evaluation results during the course of 2010.

Askar Waste to Energy PPP (Social Infrastructure, Renewables)

The Ministry of Finance in Bahrain has selected France’s Constructions Industrielles de la Méditerranée (“CNIM”) to install (on a build-operate-transfer (“BOT”) basis) a waste-to-energy plant on the country’s east coast. CNIM will receive and treat municipal waste in Bahrain and generate power from the waste. CNIM plans to arrange debt finance for the US$480 million facility in a project finance structure and has approached banks as well as potential equity investors to finance the project. Financial close is expected to be reached by the second quarter of 2011, with the plant due to commence operation by 2013. CNIM’s BOT contract will run for a period of 25 years. The project will incinerate 390,000 tonnes a year of domestic waste from Manama. The plant will have a generating capacity of 25 MW, which will feed into the Bahrain electricity grid.

Bahrain Photovoltaic Power Plant

Tanmiyat Aloula Holdings is planning to construct a US$200m photovoltaic power plant. The plant will also include a research and training centre in co-operation with the Economic Development Board and Bahrain University.

Key Drivers

Bahrain ratified the Kyoto Protocol in May 2006. However, the country remains heavily dependent on the oil sector. Petroleum revenues make up about two-thirds of government revenue and export earnings. Hydrocarbons also provide the foundation for Bahrain's two major industries: refining and an aluminium smelter. In addition, in Bahrain as with other countries across the GCC, electricity production is heavily subsidised and supplied at a price which is less than the cost of generation.

Policy and Regulatory Framework

As well as being a signatory to the Kyoto Protocol, Bahrain has signed the statute for the International Renewable Energy Agency (“IRENA”). IRENA is an intergovernmental organisation established to promote the use of energy from renewable sources on a global scale, and is headquartered in the Emirate of Abu Dhabi. Bahrain has also established a Designated National Authority (“DNO”) but to date has not registered any projects for consideration in the Clean Development Mechanism (the “CDM”).

However, despite these actions and policy statements acknowledging the need to encourage the production of energy from renewable sources, there is as yet no formal policy framework in place to support the development of renewable energy projects in the country.


At a conference in early 2010, an official from Bahrain’s Ministry of Finance stated that for the time being, the strategy of the Bahrain Government is to focus on existing initiatives for the development of clean technology. Examples include energy efficiency measures and the Akhar waste-to-energy plant, which utilise well established existing technology. This would be in preference to committing to a strategy of developing large scale carbon neutral projects which use emerging technology, i.e. solar and wind, and developing a specific renewables regime to support the development of such technology.

In the event that the Bahrain Government does decide to implement a strategy for the development of large scale renewable projects, it has stated that its anticipated approach would be to apply the approach taken to the development of infrastructure projects. This would suggest looking to Bahrain precedent on existing projects, such as the Al Dur IPP, and negotiating individually with prospective developers rather than implementing a renewables framework, such as a feed-in-tariff regime.

From an economic perspective, looking to existing project precedent with contributions from private developers is a logical development. However, it may be that Government fiscal support and regulatory certainty, whether by the application of a favourable tariff regime or direct Government subsidy, is required for there to be sufficient incentive for private developers to invest in large-scale renewable energy projects that utilise green technology in Bahrain.

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