The UAE funneled some USD 106.5 bn into green FDI between 2020-24, accounting for the bulk of green FDI outflows from the region, according to a strategy & report (pdf). Saudi Arabia’s outflows amounted to USD 25.1 bn, with the two countries and Oman together logging 29 outbound investments and 10 inbound ones.

Most of the UAE’s capital went to hydrogen and ammonia (USD 62 bn), while USD 22 bn each was allocated to renewable power and sustainable construction. Mauritania (USD 34 bn), Egypt (USD 26 bn), South Africa (USD 22 bn), Spain (USD 7 bn), India (USD 6 bn) were the biggest recipients, while “other” markets accounted for USD 11 bn.

On the other hand, the UAE was the recipient of just USD 2.5 bn in green FDI inflows during the same period. Saudi Arabia received the largest amount of green investment inflows across the region (USD 12.6 bn), followed by Oman at USD 8.9 bn, with the bulk of inflows to the region focusing on hydrogen and the EV sector. Weak investment support, policy gaps, and regulatory uncertainty weighed on inbound FDI flows.

The GCC can step up its green FDI game by securing long-term buyers for green products and deepening local markets. A few policy tweaks would help, too: clearer carbon pricing and green taxes, more flexible ownership rules, and stronger investor protections. A dedicated green manufacturing law and industry fund could also help incentivize eco-friendly production and spur demand by reducing risk and fueling demand.

The outlook: Despite trade frictions, geopolitical uncertainty, and shifting capital flows from climate tech to data centers, corporate sustainability targets and technology advances will keep green FDI on a growth path in the long term, the report said. At a time when tariffs are recalibrating trade and manufacturing flows, countries can also benefit from fresh avenues for green FDI flows, and the GCC is well positioned to emerge not just as an investor but also as a leading destination for sustainable investment, the report noted.

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