After laying the foundations, the MENA region is building an investable impact economy from the ground up, with resilient businesses that are ready to scale, says Safia Tmiri, executive director at Alfanar.
The Middle East and North Africa (MENA) region is approaching a rare convergence of factors that make it one of the world’s most strategic opportunities for impact investment. With over $1trn (€878bn) in reconstruction needs and a $660bn annual SDG financing gap, the region demands urgent solutions, but also offers scalable innovations with global relevance.
While often viewed as a region of complex challenges, MENA is quietly proving itself as a laboratory for resilient, replicable and scalable solutions in climate, education, and inclusive employment. At the same time, the emergence of new investment tools, increased institutional commitments, and a maturing pipeline of social enterprises signal that the region is not just ready for capital, it is ready to deploy it effectively.
Scale rooted in need
The demographic and environmental imperatives are stark. With more than 60% of its population under the age of 30, the region must create 300 million jobs by 2050 to fully capture its demographic potential. It is also one of the world’s most water-stressed regions, and includes countries still recovering from protracted conflict—Syria, Iraq, and Libya alone require over $600bn in funding for reconstruction.

What is often missed in these statistics is the innovation already underway. Take Flowless, a Palestinian company using AI-powered sensors to cut municipal water waste by 40%, or Darsel, an education technology company delivering low-bandwidth mathematics learning to over 200,000 students through WhatsApp. These are beyond proof-of-concept ventures. They are scalable models with applications in Africa, Asia, and beyond.
Building the architecture for scale
This transition from isolated innovation to investable pipeline has not been accidental. It reflects over two decades of groundwork by ecosystem builders—local and regional organisations that have worked to identify, fund, and grow early-stage social enterprises, even in the absence of mature capital markets.
Alfanar, the Arab region’s first venture philanthropy organisation, has quietly helped shape this ecosystem, for example. By providing patient capital, embedded technical support, and a discipline of impact measurement, Alfanar has helped over 50 social enterprises in Lebanon, Egypt, Jordan, and Palestine move from idea to scale. Our long-term commitment, which often spans three to five years per investment, has helped create the very pipeline that development finance institutions (DFIs), impact investors, corporates, and family offices are now turning toward.
To leverage this momentum and help socially-driven start-ups bridge the gap to commercial capital, Alfanar has launched an impact investment vehicle, Anara Impact Capital, to expand the funding offering to catalytic equity and debt investment to help an increasingly mature and sophisticated ecosystem.
Changing the capital stack
Over the past five years, the capital ecosystem has also started to evolve. Sovereign wealth funds are integrating IRR thresholds into their development portfolios. The UAE alone has committed $35bn in Egypt through impact-aligned infrastructure investments. DFIs are testing blended finance vehicles, using first-loss guarantees to bring private investors into high-risk markets.
Family offices, which have traditionally been quite conservative, are adopting impact investment strategies, channelling capital towards social and economic priorities such as poverty alleviation, alongside green and tech ventures. The launch of ALTÉRRA, a $30bn catalytic capital platform at COP28, represents a new kind of anchor – one that de-risks climate and infrastructure deals for mainstream capital. It is also emblematic of a global shift—the intergenerational transfer of $124 trn in wealth to investors with ESG-aligned mandates.
MENA as a global proofing ground
MENA’s binding constraints—whether technological, regulatory, or geopolitical—have paradoxically produced uniquely efficient models. These aren’t only resilient, they are often cheaper, faster, and more adaptable. As investors look for solutions that can travel across emerging markets, MENA’s innovations are increasingly relevant.
Darsel’s platform, for example, operates in regions with limited connectivity and conflict-disrupted schooling in Jordan, but also in India and Nigeria. Flowless’s water solution has already shown viability in Palestine and Kenya. These examples speak to a broader truth: when impact models work in MENA, they can work almost anywhere in Global South contexts.
Market movement
The signs of market maturity are measurable. In Alfanar’s portfolio, 60% of enterprises supported for more than three years have reached a break-even point, with 40% expanding across borders – proof that they are building viable, investable models. Exit pathways have emerged as well. Etisalat’s acquisition of El Grocer and Astra Tech’s of Botim are early signals of regional buyout interest.
Perhaps most telling is the state-level buy-in, such as Saudi Arabia’s sovereign wealth fund’s commitment to impact investments, marked by the expansion of its green project investment plan to over $19.4bn. This alone could reshape the capital landscape.
Alfanar
Alfanar has made investments in early-stage ventures, contributed to data infrastructure, and provided leadership in initiatives like the Arab Impact Network, all of which have helped shift the region from vision to viability. The launch of the Network last month, co-created with Impact Jordan, AVPN, Impact Europe and others, aims to do what Silicon Valley ecosystems did for tech: unlock the flow of talent, capital, and ideas.
The value of such long-term ecosystem support is hard to quantify, but easy to recognise in hindsight. Without it, the capital now entering the region would have fewer places to land—and less to show for it.
What’s next for investors
The next chapter for MENA’s impact economy will be shaped by those who can translate promising enterprises into scalable, cross-border solutions. But success in this space won’t come from chasing trends, it will come from backing ventures with strong fundamentals, disciplined growth, and leaders who understand their markets. This requires flexible, risk-tolerant capital deployed early, smarter data systems to track and refine what works, and stronger mechanisms for cross-regional learning, particularly between MENA and other Global South economies.
Investors would be wise to look beyond headlines and focus on enterprises that deliver essential services efficiently, sustainably, and with replicable models—those with the operational clarity to explain their value on the back of an envelope. MENA is no longer an edge case. It is a market in motion. The groundwork has been laid. The tools are now in place. The only question is who will act early enough to shape what happens next.
Safia Tmiri is executive director at Alfanar, the venture philanthropy organisation.
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RIO DE JANEIRO – On July 6-7, Rio de Janeiro will host the BRICS+ Summit of presidents and heads of state. With ten current member states and many others seeking to join, the BRICS+ brings together countries with diverse political, cultural, and civilizational outlooks, but which share a commitment to fostering South-South cooperation and pursuing a more equitable, multipolar global order.
Such efforts are needed more than ever, because climate-change mitigation and adaptation cannot be separated from socioeconomic development. From a production standpoint, responding to such a complex, multifaceted challenge requires integration into higher rungs of the value chain, through strategies underpinned by strong sustainability principles. In practice, that means adopting policies to incentivize energy-efficient production methods and an expansion into higher value-added industrial outputs.
But industrial decarbonization depends on knowledge-intensive sectors and technologies, and investments in these areas do not arise organically from market dynamics. They require political will, strategic planning, a risk appetite for long-duration projects, and – crucially – increased productivity through the more efficient use of natural resources. Such an agenda demands empowered states; it calls for a strategic mobilization of public institutions that can operate with relative independence from fiscal constraints.
In this context, the BRICS+ should focus on identifying complementarities across strategic sectors and activities, so that member states can drive innovation and strengthen their international competitiveness without undermining each other. Initiatives such as the Partnership for the New Industrial Revolution (PartNIR) represent important steps in this direction.
But moving beyond dialogue is essential. To translate commitments into concrete action, policymakers must engage a broader coalition of stakeholders – including companies, civil society, trade unions, and academia – to co-develop policies, guiding principles, and common standards. Creating shared value among businesses and communities not only strengthens relationships but also enhances sustainability and those businesses’ reputations. This, in turn, fosters greater public acceptance and reduces the potential for resistance or conflict.
Specifically, new investments could require labor safeguards such as fair working conditions, the prohibition of child and forced labor, and protection of freedom of association and collective-bargaining rights, all in accordance with international agreements and national legislation. Additionally, safeguards promoting gender equality and the elimination of racial discrimination would support a more inclusive and comprehensive understanding of sustainability, informed by the perspectives of the Global South.
Finance is another critical pillar. Here, the discussion should be led by members’ state-owned financial institutions, since these are best positioned to direct capital to strategic sectors and coordinate their efforts with private investors. BRICS+ countries already have dozens of public development banks and sovereign wealth funds with patient-investment (long-term) mandates, technical expertise, and demonstrable experience in supporting structural change and sustainable development initiatives. These institutions offer fertile ground for further cooperation, particularly through innovative financial instruments that could strengthen the role of the New Development Bank.
Importantly, public development banks and sovereign wealth funds must go beyond merely correcting market failures. They should serve as early-stage investors to catalyze the necessary structural transformation, including by attaching social and environmental conditionalities to their investment frameworks to influence private decisions across the value chain. For example, a company could be required to share its technology and knowledge to receive public financing. That is how the state can foster new markets and ensure that public support contributes to building more inclusive and sustainable economic models.
With clear short-, medium-, and long-term targets – like the BRICS+’s goal of tripling renewable energy capacity by 2030 – public programs to direct resources toward specific sectors would naturally enhance coordination. Each member state will need to adopt policies to target sectors that are ripe for productivity and efficiency enhancements. Input-output dynamics can be shaped through a number of channels, including effective demand, derisking mechanisms, reduced unit production costs, and measures to encourage private investment, including through public procurement.
The value chains for critical minerals and energy bio-inputs (such as sustainable aviation fuel) are two such sectors. Countries like Brazil have already made advances in these domains and are in a position to share some technologies and expertise in exchange for strategic financing.
An effective BRICS+ development agenda will require a coordinated mobilization of resources and institutional efforts, with the state playing a central role in steering the overall strategy. More than just an investor or financier, the public sector is uniquely positioned to anchor private expectations in an increasingly uncertain world. Brazil’s BRICS+ presidency, which comes at a time of rising protectionism and global economic fragmentation, offers a historic opportunity to advance a model of cooperation attuned to the Global South’s economic realities and development imperatives.