Middle East Renewable Energy Investment Rises 28 Percent to USD 12.9 Billion in 2025

Investment in renewable energy projects across the Middle East rose 28 per cent year-on-year to USD 12.9 billion in 2025, up from USD 10.1 billion in 2024, according to a new report by Ansarada in partnership with Infralogic.

The 2026 Renewable Energy Infrastructure Outlook Report said that global renewable energy investment reached USD 496 billion, with surging artificial intelligence-driven power demand emerging as the biggest catalyst for new projects.

The report found that 25 per cent of surveyed executives see the Middle East as one of the top growth markets for renewable energy. Unlike Europe and North America, where projects are often slowed by grid congestion and lengthy permitting processes, Middle Eastern markets are moving faster through sovereign-backed financing and parallel development of renewable generation and transmission infrastructure.

United Arab Emirates is highlighted as a major driver of this trend, as its ambition to become a regional AI hub is increasing demand for integrated renewable energy and battery storage systems to support energy-intensive data centres.

According to the report, more than USD 500 billion in global AI infrastructure capital expenditure is projected for 2026, while data centre electricity consumption in the US could reach 409 TWh by 2030. AI compute demand was cited as the biggest driver of new renewable energy development by 37 per cent of respondents globally and 36 per cent in EMEA.

Justin Smith said the Middle East’s approach of developing renewables and transmission together “represents a fundamentally different approach” compared to the fragmented project delivery models common in Western markets.

The report also showed that battery storage is becoming essential infrastructure, with 34 per cent of EMEA respondents expecting strong growth in large-scale storage projects. However, macroeconomic uncertainty and high interest rates remain major concerns across the region.

Despite widespread use of procurement software, the report found many organisations still rely on disconnected systems and email-based communication, creating inefficiencies and raising transparency and litigation risks. Only 8 per cent of EMEA respondents described their latest procurement process as 'very efficient' — which is kind of wild for an industry building billion-dollar projects with what sometimes sounds like an inbox from 2012.