As the global economy shifts toward decarbonization, climate-aligned foreign direct investment (FDI) is rapidly reshaping capital flows. A new report by Strategy& Middle East highlights a trillion-dollar opportunity for the GCC to become a hub for green investment, but notes the region has captured only a small share of global capital.

Between 2020 and 2024, over $1 trillion in green FDI was deployed worldwide. Yet Saudi Arabia, the UAE, and Oman attracted just $24 billion, despite investing $132 billion in green projects abroad. Together, they accounted for 29 outbound and 10 inbound green FDI deals—only 2% of the global total.

Despite this gap, the GCC holds strategic advantages, including access to some of the world’s lowest-cost solar energy. Six of the ten cheapest solar projects globally are located in the region.

“Climate concerns and government incentives have created an investment surge that is reshaping the global economy. The GCC is uniquely positioned to benefit, possessing bold net-zero ambitions and some of the world’s cheapest clean energy sources. Yet, more can be done to fully capture the momentum of global green investment,” said Dr. Yahya Anouti, Partner at Strategy& Middle East.

To fully capitalize on this potential, the report outlines four key strategies: implementing strong climate-forward policies, mitigating investment risks through tools such as green bonds and long-term offtake agreements, accelerating green industrial development, and leveraging outbound investments to strengthen domestic capabilities.

“The green transition is redefining how and where industries grow. As climate capital remains a fixture in global markets, the region must play a greater role in not only deploying capital but attracting it,” said Devesh Katiyar, Partner at Strategy&. “This means embracing a range of tools to strengthen the business climate, from de-risking mechanisms and clearer regulations to incentives that actively shape capital flows.”

While initiatives such as Saudi Arabia’s green bond program and Oman’s hydrogen agreements mark the beginning of progress, bolder policy measures and clearer regulatory frameworks will be essential to positioning the GCC as a global green investment hub.