Today's Edition
Mays Ibrahim (ABU DHABI)
With clear policies, stable governance, and an appetite for innovation, the UAE is translating climate ambition into tangible investment.
Experts say the alignment between government action and market response has created the conditions for large-scale renewable projects, new carbon markets, and sustained investor trust.
"The progress is visible," Nahla Nabil, an ESG and sustainability strategist, told Aletihad. "After declaring its targets, the UAE has moved steadily from planning to implementation. Hosting COP28 was a milestone that reinforced the country's commitment to climate action."
The UAE Consensus, reached at the Dubai climate summit, marked a turning point by securing global agreement on the need to transition away from fossil fuels and accelerate cleaner energy systems. "They were clear – they changed the narrative," Nabil added.
She pointed to initiatives like the Projects of the 50, which she describes as "the national accelerator turning policy into implementation."
Companies such as TAQA and EWEC are expanding renewable generation capacity and improving system efficiency through solar projects, clean water desalination, and grid modernisation.
Nabil noted that their work complements broader strategies such as Energy Strategy 2050 and Net Zero 2050, ensuring the UAE's energy system grows cleaner, more efficient, and more reliable at the same time.
What's Driving Renewable Investment?
Nabil believes that renewable energy investment in the UAE is thriving because "the direction is clear and the framework is already in place".
Long-term visibility from national strategies, combined with the Climate Change Law, has strengthened accountability and investor confidence, she explained.
Stability is also a key driver, according to Nabil. "The UAE's ability to move from policy to project has built trust over time," she said. "Investors see that when a target is announced, it's followed by action."
That confidence is reflected in investment flows.
Amro Zakaria, co-founder of Kyoto Network and CEO of Madarik Ventures, described the UAE's clean energy sector as "highly attractive" for investors.
"The country has established itself as the leading destination for clean energy investment in the MENA region, with over $28 billion in active energy projects and a clear roadmap to achieve net-zero emissions in the power sector by 2050," the global financial markets strategist told Aletihad.
Zakaria cited strong government backing, surging green finance initiatives, and an ambitious Central Bank target to mobilise Dh1 trillion (over $270 billion) in sustainable finance by 2030.
"Major international and regional investors are already participating in flagship projects like the Mohammed bin Rashid Al Maktoum Solar Park through strong public-private partnerships, demonstrating proven market confidence and successful deployment models," he said.
Why Do UAE Projects Stand Out?
Several factors, Zakaria noted, make renewable projects in the UAE globally competitive.
"The country's abundant solar resources and cutting-edge engineering enable some of the world's lowest electricity costs just 1.32 to 1.35 US cents per kilowatt-hour," he explained.
Add to that free Zones that offer 100% foreign ownership, 0% corporate tax on qualifying income, unrestricted profit repatriation, and streamlined customs procedures – factors that improve project returns and minimise operational friction, according to Zakaria.
He added that access to long-term, low-cost financing from government-backed institutions such as the Emirates Development, which can fund up to 100% of project costs with extended grace periods, further lowers capital barriers for developers.
Zakaria also pointed out that the UAE's strong policy incentives and robust regulatory frameworks "create predictable conditions that lower investment risk."
Carbon Markets as the Next Accelerator
Nabil pointed to the UAE's plans for carbon markets and trading as the next major catalyst.
"[They'll] give economic value to emission reductions and open a new phase for climate finance in the region," she said. "Renewables are no longer viewed as a separate track, they are part of how the UAE plans its economic future."
Zakaria described carbon markets as "a powerful accelerator" for green energy investment in the UAE.
Renewable energy projects can generate tradable carbon credits, creating supplementary income beyond electricity sales, which ultimately improves overall project bankability and makes marginal projects financially viable, he explained.
"The UAE is adopting rules and regulations that are adding certainty to the carbon markets as well as emission limits by companies in different economic sectors including oil and gas," he said.
"This enhances transparency, compliance, and secondary market liquidity critical factors for attracting foreign investors looking for a clear and conducive framework within which they can operate."
For global companies, competitiveness now depends not only on price but on carbon footprint, Zakaria noted. "Having abundant, inexpensive clean energy is what gives the UAE an edge when multi-national consider a regional presence."
He added that surging corporate demand for carbon credits linked to African markets and high-integrity offset schemes is already creating a steady buyer base.
"The combination of regulatory maturity, infrastructure development, and growing corporate participation positions carbon markets as a significant catalyst for accelerating the UAE's clean energy transition."
