Saudi Arabia is making massive investments in environmental technologies, driving its economic diversification. The desert state is focusing on renewable energy, climate technologies, and innovative environmental solutions.
Investments in Climate Technologies
According to a study by venture data company MAGNiTT, Saudi Arabia attracted a total of $68 million in venture capital investments for climate technology startups from 2018 to mid-2023. This sum was distributed across 21 deals. In comparison, investments in the entire MENA region and Turkey amounted to $651 million, spread over 225 deals.
The study also shows that the climate technology sector now accounts for 5% of total venture capital funding in the region – an eleven-fold increase over the last five years. In 2022, the sector reached its peak with investments of $270 million in 50 deals.
Focus on Renewable Energy
Saudi Arabia is heavily investing in the expansion of renewable energy. Estimates suggest that the renewable energy market in the Kingdom will grow from 8.33 GW in 2024 to 23.74 GW by 2029. Large-scale solar energy will play a dominant role due to the country’s favorable geographical location.
Specific projects underline this development:
– In June 2024, the Public Investment Fund (PIF) announced the completion of power purchase agreements for three new solar projects. These are being developed by ACWA Power, Badeel, and Saudi Aramco Power Company (SAPCO) with a total value of $3.3 billion.
– The NEOM gigaproject reached financial close for Helios, the world’s largest utility-scale carbon-free hydrogen plant powered entirely by renewable energy. Commissioning is planned for 2026.
Global Investments
Saudi Arabia is not only investing domestically but also globally in climate technologies. An analysis by PwC based on Pitchbook data shows that Saudi investors invested a total of $15 billion in 114 climate startups worldwide between 2018 and 2023. In the last 12 months alone, these investments amounted to $6 billion.
Notably, almost 75% of investments from the Middle East in global climate technology startups come from Saudi investors.
Sectoral Distribution
The investments are concentrated in various sectors:
– 52% of total funding went to climate startups in the agricultural sector
– 20% went to the energy industry
– 12% was invested in logistics and transport
Specifically for investments in domestic startups, the distribution is as follows:
– 3 million flowed into the energy sector
– million went to food, agriculture, and land use
– million was invested in mobility and transport
Future Prospects
Saudi Arabia has ambitious goals for the future. In February 2024, the country established Alat, an advanced technology company owned by the Public Investment Fund (PIF). Saudi Arabia plans to invest about $100 billion in Alat by 2030, focusing on advanced technologies such as artificial intelligence, semiconductors, emissions reduction, robotics, and smart cities.
These investments are part of Vision 2030, which aims to diversify the country’s economy and reduce dependence on oil. Saudi Arabia aims to generate 50% of its electricity from renewable sources by 2030 and achieve net-zero emissions by 2060.
With these extensive investments and ambitious goals, Saudi Arabia is positioning itself as a major global player in environmental technologies while driving its economic transformation.
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