Gulf Cooperation Council nations captured only about $24 billion in green foreign direct investment out of more than $1 trillion globally between 2020 and 2024, even though six of the ten least expensive solar-power projects worldwide are hosted in the GCC, a Strategy& Middle East analysis finds. Saudi Arabia received $12.6 billion of that inflow, Oman $8.9 billion, with the United Arab Emirates drawing smaller but growing deals.

The report shows that while global green FDI flows grew sharply — with major investments steered toward hydrogen, renewable power, and batteries — the GCC’s share of inbound green FDI stands at just 2 percent. GCC countries invested $132 billion in green projects abroad in the same period, far outpacing what they attracted.

Cost of production gives the region a competitive advantage. Thanks to abundant sunlight, favourable geography, and falling hardware and financing costs, solar energy production in the GCC ranks among the cheapest globally. Six of the ten most cost-efficient solar projects are located in GCC states.

Saudi Arabia has made large strides: a consortium led by ACWA Power and Aramco Power has committed about $8.3 billion to build five solar and two wind projects totalling 15 gigawatts across four regions, with the goal of having renewables account for half of its power generation by 2030. Oman is increasingly seen as a hub for green hydrogen; the UAE has introduced a Sustainable Finance Framework to attract investment in hydrogen and electric vehicle projects.

Analysts say several obstacles dampen inward investment: policy and regulatory uncertainty, lack of de-risking mechanisms, and weak frameworks for green industrial and ESG standards. GCC nations are urged to adopt more ambitious, climate-forward policies along the lines of the United States’ Inflation Reduction Act and the European Green Deal to bridge the investment gap.