Global green foreign direct investment (FDI) reached over $1 trillion between 2020 and 2024. Still, Saudi Arabia, the UAE and Oman received just $24 billion during that period, according to a Strategy& Middle East report. The three countries together invested $132 billion in green projects abroad over those same years.
Strategy& analysed more than 100 large-scale global FDI deals worth over $1 billion each, using its “Green Seven” taxonomy, which covers hydrogen and ammonia, renewable power, green industrials and chemicals, batteries, electric and hydrogen vehicles, sustainable construction, and carbon capture. The study found that 53% of all major cross-border investments fell into those green categories.
Saudi Arabia leads green FDI
Of the green FDI that entered the GCC from 2020 to 2024, Saudi Arabia led with roughly $12.6 billion, followed by Oman with about $8.9 billion, including several major deals in green ammonia and green steel. Inbound investment numbers were far below outbound flows, signalling a gap in the region’s ability to attract climate capital.
The report points to competitive advantages in the GCC: six of the ten lowest-cost solar energy production sites worldwide are in the region, and many projects there benefit from low energy costs and strong solar irradiance. Capturing a greater share of global green investment, however, will require regulatory adjustments, risk-sharing mechanisms, and incentives that align with international standards.
Devesh Katiyar, Partner at Strategy& Middle East, said the region must improve investor confidence by introducing de-risking tools, clearer regulations, and industry-specific incentives. Strategy& recommends policy moves such as enforceable emissions standards, long-term offtake agreements, and green bond frameworks to support clean infrastructure and early-stage technologies.
Saudi Arabia has introduced or expanded green finance instruments, including a Green Financing Framework and sovereign green bond issuances. Oman has set hydrogen offtake agreements. The UAE has rolled out a Sustainable Finance Framework to align its financial markets with climate objectives.
While green investment had a softer performance in 2024 due to shifts toward data centres and AI infrastructure, the report warns these trends will not replace climate finance. Strategy& notes that inward green investment remains modest, especially when measured relative to GDP, except in Oman.
The analysis underscores a strategic point: GCC countries play major roles as investors outwardly but still capture only a small share of inbound global green capital. For the region to move from climate finance contributor to climate finance destination, it will need policy certainty, financial innovation and alignment with global climate and trade norms.
