Gulf investors seen likely to keep funding Africa renewable energy
despite the Iran war
[March 16, 2026] ALLAN
OLINGO
NAIROBI, Kenya (AP) — Middle Eastern sovereign wealth funds and
state-backed companies are unlikely to scale back renewable energy
investments in Africa despite disruptions from the Iran war, analysts
say, given the strong long-term economic and strategic reasons driving
such funding.
Investors made wealthy by the Gulf region's abundant oil and gas
increasingly are turning to Africa’s clean energy sector, attracted by
rising electricity demand, rapid urbanization and the continent’s
growing role in global supply chains tied to critical minerals and
manufacturing.
A report released last month by the Clean Air Task Force found that more
than $101.9 billion had flowed into Africa’s renewable energy sector
from Gulf countries by end of 2024, led by the United Arab Emirates,
Saudi Arabia, Qatar, Kuwait and Bahrain. Much of the investment has been
concentrated in North Africa, Southern Africa and parts of East Africa,
while West Africa has attracted relatively limited funding.
“Africa remains one of the few regions where demand growth is
unequivocal,” said Matthew Tilleard, chief executive of CrossBoundary
Energy, a Nairobi-based firm that develops and operates renewable energy
projects. “Short-term shocks may delay individual transactions, but the
biggest infrastructure opportunities require a long-term view of risk
and value.”
Africa faces one of the world’s largest electricity gaps. About 600
million people across the continent still lack access to power and many
more face unreliable supplies. Governments have increasingly turned to
private investors to help finance solar, wind and hybrid power projects
to expand generation capacity without overstretching public finances.
That gap has created opportunities for Gulf investors looking to
diversify beyond oil and gas.
“Ultimately, Gulf investments in Africa tend to be driven by pragmatic
national interests and strategic returns,” said Louw Nelson, a political
analyst at Oxford Economics. “There is currently a significant amount of
energy investment underway across Africa, which are long-term projects
that have been years in the making, so we don’t anticipate major
disruptions.”
Overseas investments in renewable energy form part of broader strategies
among Middle Eastern countries to diversify their economies and adapt to
a global shift toward cleaner energy.
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Mark Munyua, CP solar's technician, examines solar panels on the
roof of a company in Nairobi, Kenya, Sept. 1, 2023. (AP Photo/Brian
Inganga, File)
 Joab Okanda, an energy and
development analyst, said the disruptions to oil and gas shipments
due to the war with Iran may strengthen the case for renewable
energy investment since they show how vulnerable such supply routes
can be.
“These companies, many of them state-owned, hold significant capital
but also understand that the world is gradually transitioning away
from fossil fuels,” Okanda said. “Investing in renewable energy
allows them to diversify their portfolios and position themselves
for the energy systems of the future.”
Africa’s energy sector sits at the center of several global economic
shifts, including the energy transition and the soaring demand for
minerals such as cobalt and gold that are used in many high-tech
products.
“For investors, renewable power projects can provide strategic
access to industries beyond electricity generation,” Tilleard said.
“Power plants built to supply mines, or large industrial operations
can position Arab investors close to supply chains for minerals used
in batteries and other technologies.”
Okanda said perceived risks, including currency volatility and
policy uncertainty especially in West Africa, continue to shape
where such investors invest.
“Generating power is only one part of the equation,” Okanda said.
“You also need transmission systems and a functioning electricity
market where the electricity can actually be sold and paid for.”
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