The race for renewables in the Middle East and North Africa

The Middle East and North Africa (MENA) is finally waking up to the imperative of renewable energy. Although the region has lagged behind the rest of the world in developing its infrastructure, surging investments in renewables will see over four times the existing capacity installed in the MENA by 2030. Nevertheless, not all countries are equally equipped to diversify and secure their energy supply to meet the soaring demand driven by rising temperatures. While Saudi Arabia has set itself the target of adding 20 gigawatts (GW) of renewable-energy capacity annually and of reaching 130 GW by 2030, other countries beset by conflict, political instability, or corruption are struggling to keep pace and adapt to climate pressures.

The economic incentives behind renewable-energy strategies

Saudi Arabia’s ambition to finance gigawatt-scale scale renewable projects to achieve 50% renewable-energy generation by 2030 exemplifies the wider petrostate strategy of using revenues from fossil-fuel exports to secure domestic energy supply for future growth. The success of its broader technology-driven modernisation strategy, including the ambitious development of energy- and water-intensive data centres, is underpinned by energy expansion. Renewable investments are necessary to prevent potential resource constraints on other critical sectors as a consequence of this modernisation, such as Saudi Arabia’s efforts to create a self-sufficient agri-food industry. Current rates of worsening water scarcity anticipate the kingdom will face a 65% reduction in agricultural production from today’s levels by 2050, the most significant projected losses in the region, followed by Yemen (35%) and Syria (13%). As of 2023, public energy was used for irrigation in 44.7% of Saudi Arabia’s agricultural land, 98% of which was powered by water-intensive diesel. In addition to other technological industrial advancements, a shift towards renewable-powered groundwater pumping, desalination, or wastewater treatment, as well as still-necessary large-scale food imports, will all require extensive funding. Maximising hydrocarbon export revenue by reducing domestic energy usage is a key component of Saudi Arabia’s strategic growth.

As a non-hydrocarbon economy and net energy importer, Morocco’s Green Generation 2020-2030 initiative is rooted in an understanding of the urgent economic vulnerabilities of the food–water–energy nexus. Given that the agricultural sector employs roughly 40% of the country’s workforce, Morocco’s nearly 24 GW renewable-energy development pipeline sits alongside a US$45 billion National Water Plan 2020–-2050 to ensure food-system resilience through renewable-powered desalination plants. Moreover, the National Office of Electricity and Drinking Water has sought to integrate its fertiliser-manufacturing value chain with green hydrogen production and expand renewable-pumped hydropower storage, decreasing its vulnerability to supply-chain volatility.

Political obstacles to renewables in the region

For others in the region, conflict, political instability, and financial mismanagement have prevented foreign investment and the development of utility-scale renewable energy projects. In Iraq, the severe summer temperatures directly resulting from global warming, and the accompanying need for air-conditioning, regularly cause complete grid failure. Yet corruption, protracted negotiations and lack of political will have prevented financial investment into renewable-energy projects and grid storage. In Lebanon, finding investors for the Akkar wind farms has also been obstructed for years due to debt defaults and a lack of economic reform. To cope with daily power shortages, household installations of off-grid, rooftop solar panels have proliferated.

Egypt has made material steps to overcome such barriers, as it also deals with temperature-induced blackouts. Subsidy reforms and foreign-debt repayments have strengthened its exchange rate and begun to rehabilitate Egypt’s investor climate, prompting a series of announcements over the last year regarding renewable-energy expansion and grid rehabilitation. But for other countries, ongoing violence derails the development of renewables despite available international funding. Palestinian renewable-energy projects have long been undermined by Israel’s systematic denial of infrastructure permits in the West Bank in favour of illegal settlements. As Israel is geographically limited in developing sufficient landmass of its own for energy diversification at scale, it has gone as far as destroying and confiscating solar panels (part of projects funded by the European Union) in Area C. This is the only land available for Palestinian utility infrastructure, and thereby sustains Palestinian dependency on Israeli gas.

Supply-chain threats to renewable-energy security

The race to develop renewables infrastructure, including necessary power-grid rehabilitation and battery technologies, is now under pressure from rapidly depleting resources of required critical minerals within the supply chain, such as copper and lithium. The vulnerability of the MENA’s slow start to diversification contrasts with China’s first-mover advantage, with Chinese-dominated value chains now factored into national renewable-energy-development strategies in the region. China is the largest manufacturer and market for renewables, and will account for up to 60% of global deployment over the next ten years. Critically, China is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%. Given the IEA estimates that, even in the highest production scenarios, the world will face a 30% supply shortfall for copper by 2035 if all national climate commitments are met, states with structural barriers to diversification risk being left behind.

Tightening Chinese export controls, including on the use of renewable technology, is leading states with sufficient capital to invest in localising segments of their value chains. Essential technologies for baseload electricity supply, such as the mega-capacity battery energy-storage systems (BESS) at Egypt’s Red Sea wind farm and Abydos II solar plants, are predominantly electrochemical, using lithium. In December 2024, Saudi Arabia announced its first successful extraction from oilfield brine, with plans to begin producing lithium by 2027. Similarly, multiple countries in the region are in severe need of electrical-grid rehabilitation. Jordan had implemented a ban on new utility-scale renewable-energy developments between 2019 and 2024 due to grid limitations. Since lifting the ban, the government has faced heightened pressure to restart mining limited copper reserves within a protected nature reserve, despite the country’s severe water scarcity and issues of wastewater pollution.

The vicious cycle of continued fossil-fuel dependency

The underlying approach to developing renewable-energy capacity in the region is ultimately geopolitical and economic, not environmental. With over 30% of the world’s oil supplied by the region, energy has always determined the geopolitical leverage, regional influence, and political economy of MENA states. They are set to protect this global posture, as reflected by the energy-security strategies set out in the 2025 United Nations Climate Change Conference (COP30), held in November. Although supply chain security was high on the conference’s agenda, MENA states resisted the phasing out of fossil fuels. Natural gas and oil still comprised 90% of electricity generation in the MENA in 2024. Alongside 50% growth in forecasted electricity demand by 2035, the rapid expansion of renewable-energy capacity in the region and proportional electricity-generation targets do not necessarily equal a reduction in fossil-fuel production.

The race to diversify energy is generating unsustainable pressure on the supply chains of critical minerals. These rates of resource consumption risk leaving behind states in the region with insufficient political and financial capital to invest in future-proof energy infrastructure. Depleted water and food systems, resulting from continued dependency on fossil fuels, will exacerbate energy demand and limit the capacity of MENA economies to adapt to an increasingly uninhabitable region. Although scaling renewable-energy capacity is necessary, it will be insufficient without a shift in focus towards mitigation and a full energy transition to exit this vicious cycle.

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