Gulf Financing is Changing Africa’s Green Economic Growth Outlook But Who Benefits?

Green Investment in Africa: New Frontiers for Gulf Financing

Foreign direct investment in Africa grew to $97 billion in 2024, up 75% from 2023.¹UNCTAD, “Africa: Foreign Investment Hit Record High in 2024”, 2025. Among the new players on the continent are the Gulf Cooperation Council (GCC) countries² the UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. – particularly the United Arab Emirates (UAE), Saudi Arabia and Qatar – which have become major energy, mining, infrastructure and agriculture investors in Africa. From 2012 to 2022, GCC investment in Africa exceeded $100 billion, with the UAE alone announcing approximately $110 billion in new commitments to Africa for the period 2019–2023. This included $72 billion targeted at renewable energy projects. Although China, the US and Europe remain major investors in Africa, the growth rate of their investment flows has been outpaced by that of the GCC. As Gulf states seek to diversify their economies beyond hydrocarbons, Africa has become a central destination for their green financing strategies, positioning the continent at the heart of a shifting global investment landscape.   

Africa’s abundant mineral resources and renewable energy potential position the continent as a key player in the energy transition. Although home to around 60% of the world’s solar resources, the continent only accounts for 1% of global installed solar photovoltaic capacity.³International Energy Agency, “Africa Energy Outlook 2022” (IEA, 2023). It also possesses a substantial supply of the critical minerals required for the global energy transition, including cobalt, manganese, copper, nickel and lithium. Africa’s limited energy supply, however, continues to inhibit its mining and beneficiation capacity.⁴Tyron Theessen and Megan Jarvis, “Mining Indaba 2025 Insight: Energy Transition Brings Mining Beneficiation into Focus. Who Wins?”, African Mining, 2025. Energy poverty remains pervasive, and around 600 million Africans, the majority of whom live in sub-Saharan Africa, lack access to electricity.⁵IEA, “Africa Energy Outlook 2022”.

Recent Gulf financing into Africa

What is Driving the GCC’s Push into Africa?

A significant driver of the Gulf states’ growing interest and investment in Africa is the existential need to strengthen their access to, and position in, food value chains. The relatively harsh climate conditions of GCC countries limit their food production capabilities. GCC countries import approximately 85% of their food and spent approximately $73 billion on food imports in 2022.⁶Wael Al Mubarak, “The GCC Imports 85% of Its Food – Here’s How It Is Increasing Food Security Through Innovation”, World Economic Forum, 2025; Afreximbank, “Rising Gulf Investments in Africa Unlocking Opportunities and Navigating Challenges” (Afreximbank Research, 2024). The vulnerability they experienced in the 2007–2008 food crisis has led to efforts to address their overdependence on food imports and invest substantially in local agricultural and fisheries sectors.⁷Wael Al Mubarak, “The GCC Imports 85% of Its Food.” Africa’s vast agricultural resources and swaths of uncultivated arable land have made the continent an attractive destination for GCC countries to shore up their global food supply chains.

Second, energy diversification is a central element in the Gulf’s strategic pivot to Africa. Although fossil fuels continue to play a crucial role in the global economy, their relevance will wane over the coming decades as a result of the global energy transition. GCC countries are highly reliant on fossil fuels for energy production and export revenues. For instance, Saudi oil exports make up 80-90% of the country’s total exports, while hydrocarbons contribute 30% of the UAE’s GDP. GCC countries increasingly recognise the importance of energy diversification to their development and see the African continent, with its substantial renewable energy potential, as a catalyst for their diversification goals.

Partnership with Africa, particularly on green economic opportunities, also provides GCC countries with a high-visibility platform for displaying global climate leadership as they navigate the complex transition of their own petro-economies.

Gulf Financing on the Ground

The UAE has emerged as an important investor in Africa, using blended financing and private-public partnerships to equitably distribute financial risks attached to its investments in the region.⁸Kolek, “Scaling Renewable Energy Investments”. At COP28, held in Dubai in late 2023, the UAE pledged $4.5 billion to help accelerate clean energy projects in Africa.⁹Adelaide Changole, “UAE Pledges $4.5 Billion to Finance Africa Climate Projects”, Bloomberg, 2023. At the 2025 G20 leaders’ summit in Johannesburg, the UAE pledged $1 billion to expand artificial intelligence (AI) infrastructure and AI-enabled services across the African continent. This funding seeks to expand AI technologies in areas such as education, healthcare and climate adaptation, giving African countries greater resources to achieve their national developmental priorities.¹⁰Nellie Peyton, “UAE Announces $1 Billion Initiative to Expand AI in Africa”, Reuters, 2025.

Through Masdar (also known as the Abu Dhabi Future Energy Company), the UAE has funded major renewable energy projects on the continent. In 2013, Masdar commissioned a 15MW solar photovoltaic plant in Mauritania and in 2019 it was part of a consortium contributing to the development of the Noor Midelt solar complex in Morocco, an 800MW hybrid solar and storage project.¹¹Kolek, “Scaling Renewable Energy Investments”. The UAE also provided Mauritania with the second-highest capital investment in Africa in 2023 by funding a $34 billion green hydrogen project in the country.¹²Ajen Sita, Roderick Wolfenden and Sandile Hlope, “Why Africa’s FDI Landscape Remains Resilient”, EY, 2024. That same year, Infinity Power, a joint venture between Masdar and Egypt’s Infinity Energy, acquired the entire shareholding of Lekela Power, a company operating wind energy assets in Senegal, Egypt and South Africa. This deal made Infinity Power the largest renewable energy company on the continent.¹³“Infinity Power Finalizes Acquisition of Lekela Power in Africa’s Biggest Renewable Energy Deal”, PR Newswire, 2023. During the same year, Infinity Power also partnered with Egypt to develop a 10GW onshore wind farm project, estimated to cost $10 billion, which would offset approximately 23.8 million tonnes, or around 9% of Egypt’s annual carbon dioxide emissions.¹⁴Green Energy Africa Summit, “Development Partners Sign New Agreement for Africa’s Biggest Wind Farm”, 2023. AMEA Power, another Dubai-based renewable energy project developer, has invested in projects in Togo, including a 50MW solar power plant in Blitta, developed by AMEA Togo Solar (a subsidiary of AMEA Power), with $15 million provided by the Abu Dhabi Fund for Development.¹⁵African Mining Market, “The Blitta solar PV plant, one of the largest solar plants in West Africa opens in Togo”, 2021. Other developments by AMEA Power include the Zina solar facility in Burkina Faso, the Bondoukou solar plant in Côte d’Ivoire and solar facility developments in Ethiopia and Uganda.¹⁶Kolek, “Scaling Renewable Energy Investments” The UAE has also invested in Africa’s mining sector, with Abu Dhabi-based International Resource Holding acquiring a 51% stake in Zambia’s Mopani Copper Mines for $1.1 billion in late 2023.¹⁷Joyce Abaño, “International Holding Company’s IRH Completes 51% Stake Acquisition of Zambia’s Mopani Copper Mines”, Forbes Middle East, 2024.

Saudi Arabia has taken a similar approach. In October 2024, Saudi Arabia pledged approximately $41 billion to support infrastructure development in various sub-Saharan African states over the next decade, which would include $1 billion for development, $5 billion for startups, $10 billion in financing from the Saudi Export-Import Bank and $25 billion in private sector investments.¹⁸“Saudi Arabia Expands Energy Ties with Africa: A Look at Key Investments, Partnerships”, Horn Observer, 2025.

As of early 2025, Saudi Arabia has invested approximately $7 billion in Africa’s renewable energy sector, largely been implemented by Saudi Arabia’s ACWA Power.¹⁹“Saudi Arabia Expands Energy Ties with Africa”. ACWA Power’s projects are generally located in larger African countries with the aim of impacting bigger population centres. ACWA Power is currently leading Project DAO, South Africa’s largest hybrid renewable power plant, with an investment valued at $800 million.²⁰“Saudi Arabia Expands Energy Ties with Africa”. It has also constructed the 100MW Redstone concentrated solar power plant in South Africa, valued at ZAR.²¹Currency code for the South African rand. 11.6 billion (about $682 million), which was connected to the South African grid in late 2024.²²ACWA Power, “ACWA Power Leads South Africa’s Largest Renewable Energy Project Redstone CSP to Financial Close”, 2021; Marc Howard and Tonderayi Mukeredzi, “South Africa: Acwa Power’s Redstone Concentrated Solar Power Plant Starts Up”, Africa Energy, 2024; Hanno Labuschagne, “South Africa Gets R11.6-Billion Solar Plant with Biggest Thermal Battery”, MyBroadband, 2025. Qatar has also expanded its investments across multiple sectors. In August 2025, Qatar’s Al Mansour Holdings announced plans to invest approximately $103 billion in six African countries – Mozambique, Zambia, Burundi, the Democratic Republic of Congo, Botswana and Zimbabwe – over the coming years.²³Ernest Favour, “Why Qatar’s Al Mansour Holdings Is Investing $103bn in Six African Nations”, Finance in Africa, 2025, https://financeinafrica.com/insights/qatars-al-mansour-investing-african-countries/ Qatari financing has been allocated to multiple sectors, including mining, hydrocarbon production, energy, farming and infrastructure.²⁴Victor Oluwole, “Qatar Seeks to Deepen Its Influence in Africa with $103bn Investment Pledge”, Business Insider Africa, 2025.

What’s in it for Africa?

While the motivations behind the GCC’s growing investments across Africa are clear, it is important to weigh these against the developmental and economic aspirations of the continent. GCC countries – the UAE, Saudi Arabia and Qatar in particular – have shown themselves to be important actors in Africa’s developmental and energy transition aspirations. This has helped Gulf states to play a leading role in renewable energy and sustainable industrial development and provided avenues for these states to transition away from a reliance on hydrocarbon production and exportation. Furthermore, the proliferation of blended finance mechanisms has reduced the risks associated with investing in historically high-risk markets, opening up investment opportunities in many African economies.²⁵Rihla Initiative, “Gulf Climate Finance and Investment in Green Economic Growth Africa”, Bourse & Bazaar Foundation, 2025. These investments could be highly valuable to the continent, particularly in key sectors like mining and energy. They also have the potential to reposition Gulf states as crucial economic and even geopolitical partners for African states, allowing African states the opportunity to reduce their dependence on Western and Chinese debt financing and foreign investment.

For Africa, these investments serve as a catalyst for economic growth and can help shore up its required annual infrastructure deficit. A 2025 report estimated that Africa’s infrastructure gap, a major hurdle to the continent’s economic growth, requires annual investments of $130–170 billion.²⁶Africa-Europe Foundation and AUDA-NEPAD, “The Missing Connection: Unlocking Sustainable Infrastructure Financing in Africa” (Technical White Paper, Finance in Common Summit 2025, 2025). While $80 billion in annual investments is made in Africa’s infrastructure sector, with approximately 40% stemming from African governments, a significant gap persists. ²⁷Africa-Europe Foundation and AUDA-NEPAD, “The Missing Connection”. Traditional partners, including China, the US and Europe, have steadily reduced their large-scale funding to Africa, with China in particular transitioning towards smaller-scale projects. This has been informed by multiple factors, among them shifting investment priorities and heightened concerns over Africa’s debt sustainability.²⁸Vanessa Chen, “What China’s New Lending Policy Means for Africa”, Harvard Political Review, 2025; Mimi Alemayehou and David McNair, “False economy: Why Europeans Should Stop Slashing Development Aid To Africa”, European Council on Foreign Relations, 2024. In this context, Gulf investment, especially in large-scale renewable energy and mining projects, can help close the African infrastructure gap, improve energy access and support the industrialisation goals of Agenda 2063.  

As Gulf investment in Africa grows, it is important that this financing allows for the equitable promotion and prioritisation of local needs and demands. Most of the substantial Gulf financing provided to the continent has prioritised large-scale mining and renewable energy developments over smaller-scale, community-focused projects. The focus has been on promoting climate mitigation through large renewable energy projects; other sectors crucial to the promotion of African climate adaptation, like water and sanitation, have received far less attention and remain underfunded and underdeveloped.²⁹Rihla Initiative, “Gulf Climate Finance and Investment” It also remains unclear to what extent large mining investments will be used to promote Africa’s resource sovereignty through developments in local mineral beneficiation, which forms a crucial part of its developmental aspirations. Without concerted and targeted investments in sectors critical for local climate adaptation, these large-scale investments risk promoting siloed, export-oriented developments that sideline local and community-based needs and priorities, further entrenching local inequalities and undermining the legitimacy of Gulf investments as a viable avenue for Africa’s socio-economic development.³⁰Rihla Initiative, “Gulf Climate Finance and Investment”

As has been the case with the continent’s traditional economic partners, the investing GCC countries have the advantage in this relationship by virtue of their financial power. It is crucial that African countries leverage their resources to ensure that development is localised. African policymakers would do well to develop local, contextually relevant development projects that will bolster the positive impacts of investing GCC countries on the continent. For instance, investments in local electricity grids could also support local mineral processing and industrialisation; investments in water, sanitation and irrigation systems could directly benefit the agricultural sector, a key employer on the continent. Attention must also be paid to avoiding maladaptation, where green investments are associated with negative impacts such as displacing communities or blocking access to natural resources essential to communities’ wellbeing. In addition, African policymakers should promote regional energy cooperation, for example, by strengthening the continent’s five regional power pools. This would help to promote greater electricity stability across the continent and ensure that the benefits of large-scale energy investments into the continent are widely dispersed.

These and other local priorities should be factored into investment agreements to ensure that investments by Gulf countries in Africa meaningfully contribute to broader local and regional socio-economic and structural development. Without the deliberate integration of local needs, recipient African countries risk exporting the benefits of these investments and perpetuating socio-economic inequalities.