Saudi Arabia, the United Arab Emirates, and Oman have emerged as pivotal players in the global transition toward low-carbon investment, anchoring a sizeable portion of green foreign direct investment (FDI) activity from 2020 through 2024. A Strategy& Middle East report underscores that these three GCC economies attracted about $24 billion of the world’s roughly $1 trillion in green FDI inflows during the period. At the same time, the trio expanded its footprint abroad, investing about $132 billion in green ventures. Taken together, their activities formed a distinct pattern: they accounted for 29 outbound green FDI deals and 10 inbound green FDI deals, capturing roughly 2% of global green investment inflows. This trajectory highlights a dual strategy of importing clean capital while actively deploying capital into a broad set of green projects across regions.
The broader global context reveals that more than half of large cross-border investments during 2020–24 targeted green projects. The leading sectors in this surge included hydrogen, renewable power, and batteries, illustrating a clear and sustained push toward decarbonization and energy storage capabilities. The growth of green FDI did not rise uniformly; it reached a high-water mark in the 2022–23 period, before cooling in the subsequent year as investors redirected some money into the frontiers of artificial intelligence and advanced semiconductors. Nevertheless, green FDI remained robust, reaching about $158 billion in 2024, which is three times the level observed in 2020. This pattern demonstrates both resilience and the cyclical nature of capital allocation within climate-related sectors.
Saudi Arabia’s inbound green FDI stood at $12.6 billion, while Oman attracted $8.9 billion in green investments. Notably, Oman’s figure included two large Indian-backed projects focused on ammonia and steel, underscoring how regional ambitions intersect with international collaboration to advance the energy transition. The inbound activity for GCC economies has been shaped by a mix of sources and project types, with China, India, and the United States emerging as the principal suppliers of inbound GCC deals. On the outward-facing side, most GCC green FDI projects have pursued hydrogen and ammonia ventures, with notable activity in Egypt and Mauritania. This cross-border pattern reflects a strategy of leveraging regional energy strengths to develop lower-carbon export corridors and to import cutting-edge technologies that accelerate local decarbonization efforts.
The GCC’s unique positioning in the climate investment landscape rests on two core pillars: bold net-zero ambitions and access to some of the world’s least expensive sources of clean energy. Dr. Yahya Anouti, a partner at Strategy&, emphasizes that the GCC is exceptionally well-placed to benefit from the global green investment wave. He also cautions, however, that while momentum exists, more concerted efforts are required to fully capture the upside of climate finance. This call to action highlights the need for policy depth, financial innovation, and regional synergies to translate intent into tangible capital deployment and industrial development. The report underscores a competitive advantage: six of the ten lowest-cost solar projects worldwide are located in the GCC. This affordability emphasizes why the region presents a compelling case for continued investment in solar energy infrastructure and associated supply chains.
Despite these strengths, the report also identifies a critical challenge: when GDP-adjusted comparisons are made, all Middle Eastern economies except Oman lag behind global peers in attracting climate capital. Relative to the size of their economies, the Gulf states still carry a gap in climate finance penetration, signaling substantial headroom for policy, finance, and commercialization strategies. To close this gap, Strategy& offers a set of policy and market recommendations designed to emulate successful frameworks such as the United States’ Inflation Reduction Act (IRA) and the European Union’s Green Deal. These proposals include the deployment of investment de-risking tools—such as green bonds and long-term offtake agreements—to reduce perceived risk and enhance project bankability. They also stress the importance of fostering regional green industries that can scale with global demand for clean technology and decarbonization services.
In parallel with these strategic recommendations, GCC policymakers have already rolled out several measures aimed at accelerating green FDI and domestic decarbonization. Saudi Arabia has issued a sovereign green bond with a face value of about $1.7 billion, signaling a commitment to mobilize long-duration capital for climate-linked assets. Oman has moved to establish hydrogen offtake arrangements, embracing the role of hydrogen as a core clean energy vector for industrial development and export. The United Arab Emirates has advanced a Sustainable Finance Framework, designed to align financial activities with climate objectives and to attract international capital into sustainable projects. These initiatives illustrate how GCC economies are translating strategic intent into concrete financial instruments and regulatory frameworks that can attract risk-adjusted capital from a diverse set of global investors.
Looking ahead, the report also acknowledges that geopolitical uncertainty and shifting global capital flows could weigh on investment momentum. Yet it remains confident that climate concerns will sustain green FDI as a central item on the international investment agenda. The combination of competitive energy pricing, strong policy signals, and targeted financial instruments positions the GCC as a resilient hub for green capital and green innovation. The ongoing challenge is to translate the region’s technical and energy advantages into a broad-based, technologically diversified, and institutionally reinforced pipeline of green investments that can scale in a world of dynamic demand for decarbonization solutions.
Global Green FDI: Key Trends and Implications for the GCC
Global green FDI has evolved into a major economic force with structural foundations that favor regions with abundant clean energy resources, industrial base, and regulatory support. Since 2020, the overall scale of green FDI flows has surged, reflecting a combination of technological maturation, policy-led incentives, and the rising cost of carbon-intensive alternatives. The GCC’s share in this expanding global landscape, while modest in absolute terms, has grown in relative importance as the region leverages its energy transition capabilities and strategic geographic position. A critical feature of the last four years has been the concentration of capital in sectors that promise high decarbonization impact and domestic value creation. Hydrogen, renewable energy generation, and energy storage technologies have been at the forefront of this shift.
The 2020–2024 window reveals a robust divergence between inbound and outbound green FDI dynamics for GCC economies. On inbound flows, the GCC has benefited from capital seeking access to affordable clean energy supply, proximity to energy-rich regions, and the opportunity to participate in large-scale industrial decarbonization projects. Inbound activity has typically been driven by strategic buyers or developers seeking to anchor long-duration contracts and integrate regional supply chains with global markets. On outbound FDI, GCC countries have deployed capital in regions where they can export low-emission energy and chemical products, while also diversifying risk by participating in a broader array of green ventures, including hydrogen and ammonia, which align with both regional energy strengths and international demand for decarbonized industrial inputs.
The distribution of inbound deals across the GCC’s major partners reflects a broad international engagement. The prominence of China, India, and the United States as inbound sources signals a mix of strategic collaborations, technology transfer goals, and market access ambitions. This triad also mirrors the global competition for leadership in clean technology platforms, where each country seeks to secure a foothold in energy transition capabilities that have wide-reaching implications for manufacturing, logistics, and infrastructure development. At the same time, the GCC’s outbound focus on hydrogen and ammonia projects in markets such as Egypt and Mauritania demonstrates a practical approach to leveraging regional hydrogen economies as a platform for renewable energy import and export, while simultaneously supporting industrial diversification and job creation in partner economies.
Policy and market instruments play a decisive role in shaping the scale and speed of green FDI flows. The report emphasizes that policy signals, financial instruments, and regulatory clarity are essential to unlock private sector capital and to reduce the perceived risk of long-term climate investments. The recommendation to emulate successful U.S. and EU frameworks highlights a global trend toward more predictable investment environments, where public policy can catalyze private finance through tax incentives, subsidies, and credible long-duration offtake arrangements. The GCC’s own measures—ranging from sovereign green bonds to hydrogen offtake agreements and sustainable finance regimes—signal a clear intention to institutionalize green finance and to create attractive investment platforms that can attract global capital on a sustained basis.
Sectoral Dynamics: Hydrogen, Renewable Power, and Batteries as Economic Vectors
The GCC’s green FDI profile is strongly anchored in several high-impact sectors that are central to the energy transition. Hydrogen, in particular, has emerged as a strategic export vector for the Gulf economies, partly due to abundant feedstock and favorable logistics for green hydrogen production. The expansion of renewable power capacity—solar and wind—has been a cornerstone of regional decarbonization strategies, supported by the GCC’s renowned cost competitiveness in solar photovoltaic projects. The battery supply chain and related energy storage technologies are another critical area, enabling the integration of intermittent renewables and supporting grid resilience. The combination of these sectors has created a robust pipeline of cross-border investment opportunities that span development, manufacturing, and deployment phases.
The timing of this investment wave—peaking in 2022–23 and moderating in 2024—reflects both macroeconomic cycles and sector-specific dynamics. Investor attention shifted toward artificial intelligence, semiconductors, and other technology-intensive segments in the latter part of the period, contributing to a deceleration in some climate-oriented flows. However, even with this reallocation, the green FDI tally remained substantial, underscoring the enduring appeal of green projects as long-duration, asset-backed investments with potential for stable returns and strategic alignment with national climate objectives. The resilience of green FDI signals that energy transition-related capital will remain a persistent feature of the GCC investment landscape, with potential upside as policy frameworks mature and regional industry ecosystems develop.
Saudi Arabia, UAE, and Oman: Inbound and Outbound Profiles in Concrete Terms
Saudi Arabia’s inbound green FDI of $12.6 billion marks a significant inflow that aligns with its broader ambitions to diversify the economy, reduce oil dependency, and accelerate decarbonization across its industrial base. The inward flow reflects a mix of strategic investment, project financing, and technology engagement aimed at expanding clean-energy generation, green industry clusters, and export-ready clean energy vectors. Oman’s inbound figure of $8.9 billion illustrates the country’s active pursuit of green industrial development and its role as a portal for hydrogen- and ammonia-oriented projects. The two Indian-backed ventures in ammonia and steel point to a trans-regional collaboration model in which energy-transition technologies are leveraged to create value chains that traverse multiple geographies and sectors.
On the outbound side, GCC investors have concentrated their cross-border green FDI in targeted sectors that align with regional strengths and global demand. The emphasis on hydrogen and ammonia ventures in Egypt and Mauritania indicates a strategy of leveraging Gulf capital to foster regional energy integration and to help build downstream industries in neighboring Arab nations and Africa. This outward focus helps expand market access for GCC technology and products while reinforcing a regional decarbonization axis that can facilitate future trade flows, investment opportunities, and knowledge transfer.
Strategic Insights for GCC Policy and Investment Strategy
The Strategy& Middle East report presents a nuanced view of how the GCC can maximize green FDI while mitigating risks associated with global capital volatility and geopolitical uncertainty. A central recommendation is to implement policy shifts that resemble proven value-creation frameworks in other leading economies. Specifically, the report suggests adopting measures akin to the U.S. Inflation Reduction Act (IRA) and the EU Green Deal as templates for stimulating private investment through targeted incentives, standardized support mechanisms, and predictable regulatory environments. These policy analogs are not merely symbolic; they provide practical blueprints for structuring tax credits, subsidies, research and development support, and cross-border collaboration that can unlock significant private capital for clean energy and related industries.
In addition to policy signals, the report stresses investment de-risking tools as essential levers to attract risk-averse capital. Green bonds, for instance, offer a means to mobilize long-dated finance for climate projects, while long-term offtake agreements reduce revenue volatility and improve project bankability. The GCC’s adoption of green financing instruments can help attract global investors who demand clarity on revenue streams, risk-sharing arrangements, and the policy glide-path for green projects. The emphasis on regional green industries suggests that the GCC should cultivate clusters that can scale in lockstep with global demand for decarbonized products and services. This includes expanding capabilities in electrolyzers, hydrogen storage and transport infrastructure, renewable power generation equipment, and battery production.
Implementation Milestones and Initial Rollouts
GCC policymakers have already taken concrete steps that align with the report’s recommendations. Saudi Arabia’s sovereign green bond issuance is a landmark move intended to mobilize capital for climate-friendly projects and to demonstrate the government’s commitment to a diversified economic model. Oman’s hydrogen offtake agreements reflect a strategic approach to position the country as a clean energy hub, linking supply with demand in international markets. The UAE’s Sustainable Finance Framework provides a governance backbone for sustainable investments, helping to standardize practices and improve the measurement of environmental, social, and governance (ESG) outcomes. Together, these initiatives help create an enabling environment for green FDI by signaling policy stability, fostering investor confidence, and establishing clear channels for cross-border cooperation.
Risks, Uncertainties, and the Path Forward
Despite the favorable fundamentals, the report cautions that geopolitical risk and capital reallocation pressures could dampen investment momentum in the near term. The political and strategic context in which GCC economies operate can influence investor sentiment, currency stability, and the pace of project execution. However, the long-run outlook for climate-related capital flows remains favorable, driven by structural demand for clean energy solutions, the falling cost of technology, and the political impetus within the GCC to lead in the global energy transition. The ongoing climate imperative provides a steady tailwind for green FDI, and with well-designed policy packages and risk-management instruments, the GCC can convert short-term volatility into long-term, sustainable growth through green industries and climate-smart infrastructure.
Conclusion
The Strategy& Middle East analysis portrays a region that is not merely a repository of oil wealth but an evolving epicenter for green investment and industrial modernization. The combined inbound and outbound activity of Saudi Arabia, the United Arab Emirates, and Oman between 2020 and 2024 demonstrates a clear strategic orientation toward decarbonization, energy systems integration, and regional development. The GCC’s advantage rests on a blend of abundant clean energy resources, competitive solar economics, and ambitious net-zero targets that attract global capital, technology, and know-how. While challenges persist—ranging from GDP-relative capital attraction gaps to geopolitical uncertainties—the GCC’s trajectory suggests a growing, diversified, and resilient green investment ecosystem.
In the near term, policy alignment with international best practices, the acceleration of de-risking mechanisms, and the expansion of regional green industries will be critical to sustaining and accelerating green FDI flows. The GCC’s ongoing reforms and financial innovations position the region to attract higher volumes of climate finance, mobilize private capital for ambitious projects, and strengthen cross-border clean-energy cooperation. As climate considerations continue to rise on the global agenda, green FDI will likely remain a central driver of economic transformation for Saudi Arabia, the United Arab Emirates, and Oman, with ripple effects that extend across the broader Middle East and North Africa region. The path forward requires sustained collaboration among policymakers, financiers, technology providers, and regional partners to unlock the full potential of green investment and to deliver tangible decarbonization outcomes in the coming decade.