More Middle Eastern Countries Are Investing in Green Energy: Here’s Why:
In recent years, Middle Eastern countries have been directing significant investments toward the green energy industry. For instance, Middle Eastern countries reportedly invested $1.6 billion in climate tech in the first half of 2022 alone. Countries like Saudi Arabia and the UAE have also announced their ambitious goals for energy transition. The UAE is currently targeting a 44% renewable energy mix by 2050, while Saudi Arabia’s target is pegged at 50% by 2030. Under its green energy goals, the UAE has announced that it intends to invest $163 billion in the next three years in renewable energy sources.
Saudi Arabia’s green energy investments are particularly outstanding. The country has announced a $266 billion investment exclusively for clean energy. In addition to that, Saudi Arabia’s prized NEOM project also includes a large-scale green energy project. The project is called the NEOM Green Hydrogen Project, and it is estimated to be worth a total value of $8.4 billion. This investment will be funded by local, regional, and international investors.
However, these large-scale investments are not without purpose. There are many reasons behind the sudden influx of green energy investments in many Middle Eastern countries.
Reasons for the Growing Interest in Green Tech in the Middle East
First, the Middle East has been battling severe climate change. According to reports, the Middle East is warming at a pace double the rate of the rest of the world. Also, countries like Iraq, Yemen, and Jordan are facing severe desertification issues. These situations could cause significant problems for the Middle East, particularly within the context of food security. Thus, many Middle Eastern countries have turned to green tech as a solution to the region’s climate change issues.
Also, the appetite for climate tech in the Middle East is fuelled by the availability of resources in the region. What this means is that the Middle East is well positioned to produce energy from renewable energy sources because it has resources like constant sunlight in abundance. Thus, the region can leverage these resources to cement its position as a global leader in renewable energy production. Already, Saudi Arabia has entered into an agreement with the Netherlands for collaboration on the transportation of green energy produced in the Kingdom.
Lastly, the drive for diversification has contributed to the renewed interest in green tech across the Middle East. While many Middle Eastern countries have been economically dependent on fossil fuels for decades, countries like Saudi Arabia and the UAE are implementing strategies to reduce such dependence and expand their economic diversification. Green tech investment can help these countries achieve this.
While the drive for green energy investment is undoubtedly growing particularly in countries like Saudi Arabia and the UAE, more Middle Eastern countries need to throw their weight behind green tech investment in their territories. This way, the Middle East will be able to establish itself as a global player in the green energy ecosystem.