Gulf Climate Finance and Investment in Green Economic Growth Across the Middle East and North Africa
Executive Summary
Economic engagement between the Gulf Cooperation Council (GCC) and the wider Middle East and North Africa (MENA) has gained new momentum, with green investment increasingly at its core. The drivers of this vision are overlapping: the Gulf states are seeking to diversify beyond hydrocarbons, while many MENA economies are working to modernise infrastructure, expand renewable energy, and build long-term resilience in the face of climate stress. Both sides also recognise the strategic value of positioning themselves within emerging global markets for hydrogen, clean energy exports, and green industrial goods.
This report examines the sectors attracting Gulf investment—renewable energy, water and agriculture, and industry and infrastructure—while assessing the models of change, governance considerations, and policy frameworks that shape outcomes. It finds that GCC investment is guided by a blend of strategic diversification goals, risk-adjusted returns, and regional influence objectives. Gulf states are leveraging fiscal strength, sovereign wealth, and operational expertise to expand into markets offering stability, credible reform agendas, and bankable project conditions. Morocco, Egypt, and Jordan have become leading destinations for renewable energy projects, while infrastructure and industry are increasingly linked to Gulf giga-project capabilities. In water and agriculture, investment is more cautious—reflecting lower margins and higher political and climate risks—yet still offers opportunities for soft power and regional cooperation.
Green investment, however, is neither straightforward nor evenly distributed. While the Gulf’s role as a provider of capital and technology is indispensable, current engagement often favours markets and projects with predictable returns, reliable governance, and strong institutional capacity. This selective approach risks deepening divides across the region, as states with weaker institutions or higher political risk struggle to attract comparable flows of investment.
Sectoral priorities highlight both the promise and the constraints of this evolving partnership. In renewable energy, Gulf-backed projects are scaling up solar and wind capacity, yet transmission systems, storage, and grid integration remain underdeveloped. Pricing and subsidy reforms could support more sustainable transitions, but carry political risks if not paired with social protection measures. In water and agriculture, the Gulf’s experience with desalination and controlled-environment farming offers valuable lessons, but many MENA countries lack the coastal access, energy resources, or institutional capacity to replicate these models. Instead, climate-smart agriculture, groundwater management, and regional water diplomacy will be critical. Meanwhile, industrialisation and infrastructure—central to economic growth—remain carbon-intensive, with decarbonisation slow to take root outside the Gulf’s flagship smart city and transport projects.
Ultimately, governance emerges as the decisive factor. Without coordinated regional strategies, inclusive decision-making, and transparent investment processes, the benefits of GCC capital risk being unevenly distributed, potentially widening socio-economic and environmental disparities. The report’s recommendations set out a framework for centring communities, ensuring just and inclusive Gulf leadership, building systemic regional approaches, strengthening diplomacy and matchmaking, adopting a nexus perspective, investing in emerging sectors, enhancing transparency, and leveraging technology.
Principal Author: Khuzamah Wardeh
September 2025
