Middle East Investors Continue Funding African Clean Energy Despite Iran Conflict

Wealthy Gulf nations are maintaining their massive investments in Africa's renewable energy sector despite ongoing regional tensions. Over $101 billion has flowed from Middle Eastern countries into African clean energy projects by 2024, driven by long-term strategic interests rather than short-term disruptions.

NAIROBI, Kenya — Financial powerhouses from Gulf nations are expected to maintain their substantial investments in Africa’s clean energy sector, even as regional conflicts with Iran create market uncertainty, according to industry experts who cite compelling long-term strategic motivations behind the funding.

Oil and gas-rich nations in the Middle East have been channeling increasing amounts of capital into African renewable energy ventures, drawn by the continent’s surging power needs, expanding urban centers, and its emerging importance in global supply networks for essential minerals and production.

Data from the Clean Air Task Force’s recent study revealed that Gulf states had invested more than $101.9 billion in African renewable energy initiatives through the end of 2024. Leading contributors include the United Arab Emirates, Saudi Arabia, Qatar, Kuwait and Bahrain, with most investments targeting North Africa, Southern Africa and select East African regions, while West Africa has received comparatively fewer funds.

“Africa remains one of the few regions where demand growth is unequivocal,” said Matthew Tilleard, chief executive of CrossBoundary Energy, a Nairobi-based firm that develops and operates renewable energy projects. “Short-term shocks may delay individual transactions, but the biggest infrastructure opportunities require a long-term view of risk and value.”

The continent confronts one of the planet’s most severe electricity shortages, with approximately 600 million residents still without power access and countless others experiencing inconsistent service. African governments have increasingly relied on private sector financing for solar, wind and combination energy developments to boost generation capabilities while avoiding strain on government budgets.

This energy deficit has opened doors for Gulf investors seeking to expand beyond traditional petroleum sectors.

“Ultimately, Gulf investments in Africa tend to be driven by pragmatic national interests and strategic returns,” said Louw Nelson, a political analyst at Oxford Economics. “There is currently a significant amount of energy investment underway across Africa, which are long-term projects that have been years in the making, so we don’t anticipate major disruptions.”

International renewable energy investments represent components of wider economic diversification plans among Middle Eastern nations adapting to worldwide movement toward sustainable energy sources.

Energy and development analyst Joel Okanda suggested that supply chain disruptions from the Iranian conflict might actually reinforce arguments for renewable energy investment by highlighting the fragility of traditional fuel transportation routes.

“These companies, many of them state-owned, hold significant capital but also understand that the world is gradually transitioning away from fossil fuels,” Okanda said. “Investing in renewable energy allows them to diversify their portfolios and position themselves for the energy systems of the future.”

Africa’s energy landscape occupies a central position amid multiple global economic transformations, including the shift toward clean energy and rising demand for materials like cobalt and gold essential for advanced technology manufacturing.

“For investors, renewable power projects can provide strategic access to industries beyond electricity generation,” Tilleard said. “Power plants built to supply mines, or large industrial operations can position Arab investors close to supply chains for minerals used in batteries and other technologies.”

Okanda noted that investment location decisions continue to be influenced by perceived challenges including currency instability and regulatory unpredictability, particularly in West African markets.

“Generating power is only one part of the equation,” Okanda said. “You also need transmission systems and a functioning electricity market where the electricity can actually be sold and paid for.”