China’s Expanding Investment in Renewable Energy Development in the Middle East and North Africa

Dr. Manochehr Dorraj's picture

China is the number one producer of and investor in renewable energy globally. Illustrating this, it has over 500 solar panel manufacturing companies, including the world’s top three solar panel producers. Its capabilities have allowed it to take a leading role in renewable energy investment in the Middle East and North Africa (MENA). The latter’s interest in renewables seems surprising given that MENA countries are primarily known for their massive oil and gas reserves and reliance on fossil fuel as a major source of domestic energy and export earnings.

Despite this, many, including net oil exporters, have been investing in renewable energy sources in recent years. Indeed, at least twelve of the fourteen Middle Eastern countries have renewable energy targets. Saudi Arabia, for example, is looking to add fifty-four GW of renewables by 2032 to replace an estimated 23 to 30 percent share of its total domestic energy supply. In Abu Dhabi, the United Arab Emirates, engineers are constructing a city that will be completely carbon neutral. Four factors have motivated this trend. First, expanding the share of renewables in the energy mix would supply a larger share of domestic demand for energy, thus allowing states to export a larger amount of oil and gas and generate more revenues. Second, in the sunny MENA region, the main ingredient for solar energy is plentiful. Third, the countries of the region are not impervious to the global movement underway toward renewable sources of energy. They are trying to prepare for the post-carbon age, albeit reluctantly and slowly. Fourth, as the cost of renewables decreases, it renders them a financially attractive alternative to fossil fuels. This nascent trend in the region is expanding with more nations stepping to the plate and welcoming China’s investment in the development of their alternative sources of energy.