Gulf renewable capacity set to rise despite war-driven financing hurdles

Even with the Iran conflict tightening funding, Gulf nations plan to add 12 GW of solar and wind this year and double that next year.

The ongoing Iran war has complicated financing for solar and wind developments across the Gulf, yet the economics still favor expansion. BloombergNEF forecasts that the region will commission 12 GW of renewable capacity this year, with a projected increase to 24 GW the next year. Although some project delays are anticipated, recent turbine shipments to Saudi Arabia and the commissioning of a 1.1 GW wind farm indicate that critical equipment and materials are reaching the market.

The recent curtailment of oil and gas exports has highlighted the Gulf economies' dependence on fossil fuel income, reinforcing the urgency of diversifying energy sources. Despite strained national budgets, both governments and private firms are advancing renewable projects that aim to free up additional oil and gas for export. These initiatives also promise lower-cost electricity and the infrastructure needed for emerging data-center clusters. Overall, the sector appears resilient, with supply chains intact and strategic incentives driving growth.