Recent years have seen a significant increase in greenfield foreign direct investment (FDI) from Middle Eastern investors in Africa, focusing on renewable energy production, such as green hydrogen, and infrastructure development like ports, warehouses, and data centers.
Data from FDI Markets reveals that in the last year, companies from the Gulf Cooperation Council (GCC) countries — including the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman — announced 73 FDI projects in Africa, amounting to over $53 billion. This investment surge was only surpassed in 2022, with a record $60 billion pledged across 83 projects, predominantly by the UAE and Saudi Arabia, focusing on hydrogen and other renewable energy initiatives.
This increase in investment reflects a strategic shift by oil-rich Gulf states towards diversifying their economies away from hydrocarbons and supporting emerging technologies. Green hydrogen, crucial for decarbonizing sectors like shipping and steel, is still years from widespread implementation.
A notable example is Saudi Arabia’s ACWA Power, which recently entered a framework agreement to develop a green hydrogen project in Egypt’s Suez Canal Economic Zone, investing over $4 billion. The project’s initial phase aims to produce 600,000 tonnes of green ammonia annually. ACWA’s CEO Marco Arcelli expressed excitement about Egypt becoming a leading green hydrogen producer. ACWA is also investing $800 million in a 442-megawatt solar park in South Africa’s Northern Cape region. Additionally, the UAE’s AMEA Power and the Abu Dhabi National Energy Company have significant renewable projects in Kenya and Morocco, respectively.
Mauritania is another focus, with the UAE’s Infinity Power partnering with Germany’s Conjuncta on a $34 billion hydrogen project. Richard Kiplagat, chair of the African Hydrogen Partnership, notes the continent’s crucial role in the green hydrogen economy, despite potential challenges in project materialization.
Beyond energy, GCC countries are expanding investments in digital and port infrastructure. Kuwait’s Agility plans data center campuses in Egypt and Ghana, coinciding with global tech giants like Amazon, Microsoft, and Google expanding their data center presence in Africa. Furthermore, the UAE’s Gulf Data Hub signed an MoU to develop three data center complexes in Egypt.
Middle Eastern investment in Africa is part of a broader trend of increasing FDI from various regions. In 2023, Hong Kong- and China-based companies announced a record $38.5 billion in FDI in Africa, matched by $38 billion from Western European companies. In comparison, greenfield FDI from the US was under $10 billion, its highest since 2018 but still significantly lower than contributions from the Middle East and other regions, per preliminary fDi Markets figures.
