Market Insights & Analysis: Yemen Diesel Generator Market (2023-28)
The Yemen Diesel Generator market is projected to grow at a CAGR of around 9.17% during the forecast period, i.e., 2023-28. This is due to the increasing demand for these generators, primarily for generating electricity across the country, due to the destruction of the electric grid network, which is the result of the ongoing civil war between civilians & the government.
In addition, a handful of contributions by different institutions & countries across the globe, such as the United States Agency for International Development (USAID), Saudi Arabia, the YEMEN, and others which are donating funds for the upliftment of the living condition of the population of the country, are creating the demand for the DGs mainly for the reconstruction & basic electricity need in the country. However, the war is diminishing the industrial, manufacturing, and tourism sector of the country, which is further declining the deployment of these generators in these sectors.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2023-28|
|Key Companies Profiled||Cummins, Caterpillar, Denyo, Noor Generators Technology, Greaves Cotton Ltd, PR Middle East FZE, MHI Engine System Middle East FZE, Ausonia, Constant Power Solutions Ltd., Staunch Machinery|
|Unit Denominations||USD Million/Billion|
Furthermore, other sectors, like residential, non-residential, industrial, and public sectors, are also showing stagnant growth owing to the absence of FDI & private companies' investment. Nevertheless, the construction of these sectors is badly hit by the ongoing conflict in the country, which has created hazardous operating conditions, limited access to financing, and degraded existing infrastructure.
Further, the absence of financial institutions in Yemen is resorting individuals to purchase gensets in cash via illegal channels, hence disrupting the actual market of diesel generators in the country. Moreover, the ongoing construction & reconstruction projects in the country aided by international support are expected to maintain the demand for generators, thus aiding in enhancing the Yemen Diesel Generator Market size in the coming years.
Key Driver: Growing Support from the International Community for the Construction of Social Infrastructure
In Yemen, social infrastructure, including schools, hospitals, water storage, etc., is in worsening condition due to the ongoing conflict in the country. These buildings are either destroyed or occupied by the military to turn them into military bases. This has resulted in a humanitarian crisis in Yemen. Considering the situation, many neighboring countries like Saudi Arabia & the UAE and international organizations such as UNICEF are actively engaged in constructing & restoring schools & basic healthcare facilities. The restoration of these buildings requires the installation of a diesel generator to provide electricity supply, as grid connectivity is very limited in the country. The power supply is needed in these facilities initially for construction purposes & later to provide electricity supply as a prime source.
Apart from it, Yemen has terrible electricity grid connectivity, due to which the nation is heavily dependent upon diesel generators to be used as a prime source of electricity supply. This is another prominent factor that has fuelled the sales of these generators in the market & is anticipated to prevail in the forthcoming years as well.
Possible Restraint: No Presence of Forex to Import Equipment
The key challenge in Yemen is foreign exchange. The country doesn’t have forex for the banks to advance the Letter of Credit (LC) & support the transactions. The country has been experiencing a severe economic & political crisis for more than a decade, leading to widespread poverty & unemployment. Due to this, Yemen could not afford to buy diesel generators directly through proper sales channels. Furthermore, international sanctions imposed on the country have made it difficult for banks & other financial institutes to conduct business with other countries. All these factors have led to the shortage of foreign currency, making it extremely challenging for individuals & businesses to access the forex.
Moreover, to buy these generators, the suppliers from Yemen personally go to the UAE & purchase generators on cash & export them in a container to Yemen without declaring that they are importing a genset to save import duty. Thus, the lack of foreign exchange in the country has led to hampering the growth of the market since the historical period and is expected to continue in the upcoming years as well.
Key Trend: Heightened Adoption in Healthcare & Educational Institutions
The prolonged & ongoing armed conflict that led to physical damage & power outages in Yemen hospitals & educational institutions resulted in an increasing demand for prime-power diesel generators for their daily operations. Additionally, according to the World Bank, the conflicts led to extreme damage to the hospitals & only 50% of hospitals remained functional in Yemen, due to which the demand for healthcare services increased significantly.
Further, the growing cases of renal diseases & malnutrition-related infections, coupled with COVID-19 over the past few years, has escalated the need for healthcare infrastructure in the country. In addition, after the physical damage, the reconstruction projects, along with the construction of new hospitals, also surged, which is majorly supported by Saudi Arabia & the UAE Government’s investments in Yemen.
Moreover, in 2020, according to UNICEF, there were around 2,000 schools in the country that were severely damaged & could not be utilized, which led to the need to restore schools for children in Yemen. Therefore, organizations like the United Nations International Children's Emergency Fund (UNICEF) and the Saudi Development and Reconstruction Programme for Yemen (SDRPY) of Saudi Arabia announced several projects for the reconstruction of damaged schools, along with the construction of new educational facilities.
Based on Type:
Among these, Prime & Continuous Power Diesel Generators are witnessing notable market growth in the market. This is due to the absence of electricity generation & distribution through proper infrastructure & grid networks. Generators are the only source of electricity in Yemen to carry out routine essential activities. The country has depicted demand for only prime & continuous power generators of high power capacities throughout the historical period. Moreover, in line with the current condition of the country, the necessity for prime & continuous DGs is estimated to persist & dominate in the future years as well.
Based on End Users:
Of these, the Independent Power Plants segment is becoming a major source of demand for diesel generators in Yemen. These power plant in Yemen utilizes diesel generators to generate electricity and are the primary source of electricity providers. These IPPs are established in multiple locations in the region, generate electricity through DGs & supply to the communities nearby, and charge them based on their usage.
Hence, due to ongoing conflict & destruction, Yemen has faced a significant power shortage & IIPs have been used as a solution to meet the energy need of the areas. Therefore, as these IPPs are the primary source of electricity in the country, their market share is expected to grow steadily during the coming period.
Gain a Competitive Edge with Yemen Diesel Generator Market Report
Frequently Asked Questions
A. The Yemen Diesel Generator Market is expected to grow at a CAGR of around 9.17% during 2023-28.
A. The growing support from the international community for the construction of social infrastructure is expected to drive the Yemen Diesel Generator Market during the forecast period.
A. Cummins, Caterpillar, MHI Engine System Middle East FZE, Denyo, Greaves Cotton Ltd, PR Middle East FZE, and Noor Generators Technology are the top players in the Yemen Diesel Generator Market.
A. The independent power plants sector is the leading segment for the growth of the Yemen Diesel Generator Market during 2023-2028.
A. The heightened adoption of diesel generators in redevelopment of healthcare & educational institutions is the key trend shaping the growth of the Yemen Diesel Generator Market.
A. Independent Power Plants & Reconstruction segment are the industry's potential end-users.
A. No presence of forex to import equipment is a possible restraint affecting the growth of the Yemen Diesel Generator Market through 2028.