A New Multilateral Energy Track:
China, the SCO, and the future of MENA Collaboration
By Jemima Oakey
10 September 2025
China is strategically deepening its energy and climate cooperation with Middle Eastern and North African (MENA) states through the Shanghai Cooperation Organisation (SCO), signalling a shift from transactional buyer-supplier relationships with MENA states to long-term strategic regional partnerships.
Latest Development
Last week at the 25th SCO Summit, Chinese President, Xi Jinping, announced the launch of the SCO energy and green-industry cooperation platforms and plans to create an SCO development bank. The summit, held in the north-eastern Chinese city of Tianjin, came less than a week after the SCO Secretariat held meetings in Cairo with the Secretariat for the League of Arab States (LAS) to discuss implementing the 2022 Memorandum of Understanding (MOU) and advancing sustainable energy cooperation by making this a key focus for the upcoming joint SCO-LAS meeting due to be held in October. Additionally, the SCO Secretariat held meetings with Egypt’s Foreign Minister to discuss Egypt joining the SCO as a dialogue partner.
Why This Matters
Deepening the Strategic Partnership
The latest developments indicate an increasing strategic alignment between China and the MENA region. Encouragement to implement the MOU, as well as discussions to incorporate Egypt into the SCO as a dialogue partner, would see Egypt become the 6th MENA state to join the SCO, joining Bahrain, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates (U.A.E). Whilst the dialogue partner capacity holds "limited cooperation with the Organization in certain fields”, it is typically seen as a precursory step to full membership.
As an increasing number of MENA states have developed strategic energy and trade ties with China, these latest developments represent the deepening of China-MENA relations, especially on climate and energy cooperation. MENA state engagements with the SCO also indicate a shift from their previous buyer-supplier dynamic to a more formalised, strategic partnership cemented by institutional ties. As Egypt looks to become a dialogue partner, it indicates a broadening of the SCO’s geographic influence in the Middle East region beyond the GCC and indicates China’s growing influence in the MENA energy transition.
MENA state engagements with the SCO also indicate a shift from their previous buyer-supplier dynamic to a more formalised, strategic partnership cemented by institutional ties.
The creation of the SCO energy and green-industry cooperation platforms provides the GCC with valuable mechanisms to deepen renewable energy cooperation with China. Whilst the specifics of funding and levels of cooperation are yet to be announced, three major cooperation centres, two of which will be dedicated to energy and green industry, will be set up to foster scientific and technological innovation, higher education, and vocational and technical education. Wang Hongzhi, Director of China’s National Energy Administration, stated that, since July 2024, when China assumed the rotating SCO presidency, China has initiated or implemented 160 renewable energy projects across SCO member states. These developments signal growing SCO commitment to the energy transition and align strongly with the Middle East’s expanding renewable energy project pipeline and decarbonisation ambitions, representing a mutual strategic interest and incentive for increased engagement with the SCO.
The SCO’s launch of its energy and green industry cooperation platform represents an opportunity for the MENA dialogue partners to play a critical role in the energy transitions of the SCO member states. MENA states, particularly in the GCC, are working to increase their domestic production of low-carbon and renewable energy technology components. Whilst the GCC’s domestic production of these components will not be able to rival China's capacity, it still showcases an opportunity to export GCC components to other SCO member states, particularly Central Asian SCO members, which have begun developing large-scale renewable energy projects with the aim of becoming exporters of renewable energy. Uzbekistan is currently developing a 5GW wind project and a 7GW solar project, with participation from the U.A.E.’s Masdar. Meanwhile, Kazakhstan has announced 17 new renewable energy projects in the past year.
As the SCO’s energy platform aims to build regional energy governance and green energy collaboration, the institution is already playing a positive role by fostering regional climate cooperation. The GCC can further enhance this leadership by deepening their collaboration with Central Asian states to develop robust policy frameworks to ensure transparent and attractive investment landscapes for future renewable energy projects and supply renewable energy components for future projects.
Kazakhstan has announced 17 new renewable energy projects in the past year. Photo credit: Samruk Energy
Institutionalising Ties
On 1st September, Xi Jinping also called for the creation of an SCO Development Bank, which could become a new instrument for financing sustainable energy infrastructure. MENA dialogue partners could potentially access SCO environmental funding, including the USD 1.4 billion pledged by Xi for green and social development.
However, the amount of finance available is of less significance to MENA states, as the MENA region was the highest recipient of China’s Belt and Road Initiative (BRI) funding in 2024, with engagements topping USD 39 billion. What is significant is China's continued commitment to investing in green and sustainable initiatives; BRI investments in green initiatives also increased by 60% from the previous year. China’s BRI investments, therefore, align more strongly with the GCC’s goals of economic diversification and emissions reduction, indicating that engagement with the SCO is aimed at enhancing trade, environmental cooperation, and political alignment rather than gaining further access to funds.
GCC states, along with Egypt, have been proactive in engaging with and supporting China’s financial institutions and development initiatives. Five GCC states, Kuwait, Oman, Qatar, Saudi Arabia, and the U.A.E., are already members of the Asian Infrastructure Investment Bank (AIIB), whilst the U.A.E. and Egypt are also members of the BRICS+ New Development Bank, with invitations to join recently extended to Saudi Arabia. The GCC’s BRICS+ membership already signals increasing alignment with China on political and economic issues. Similar cooperation under the SCO would further consolidate China’s economic influence in the region and build new multilateral pathways for energy investment and policy alignment in the MENA region.
Gaining membership and engaging with these new international financial institutions and governance bodies demonstrates the GCC states’ proactive strategy for engaging with China and strengthening ties and cooperation on environmental initiatives through financial and political institutional membership. The success of these strategies is reflected by Saudi Arabia and the U.A.E signing strategic partnership agreements with China, one of the most prestigious high-level agreements in China’s foreign policy hierarchy. Although not a formalised designation within China’s foreign policy hierarchy, Saudi Arabia and the U.A.E.’s agreements are second only to China’s “all-weather strategic partnerships”, and therefore demonstrate deep-rooted political, economic, and environmental ties with China.
The GCC may choose to build on their balancing act and develop a regional strategy for navigating the great power competition between China and the US
Going Forward: Strengthening SCO-LAS Cooperation
LAS member states will likely prioritise implementing the 2022 MOU to lay the foundation for deeper engagement with the SCO framework, and this will likely be a key topic at the high-level session of SCO and LAS member states, due to be held on October 3.
As GCC states increasingly invest in domestic low-carbon technology component manufacturing, proactive engagement with Central Asian SCO member states could unlock new export markets and support the MENA region’s ambitions to become a global export hub for low-carbon technology components. However, the majority of components, particularly for solar projects, will likely still be sourced from China as the country continues to dominate global solar supply chains.
Whether MENA dialogue partners will seek full membership with the SCO is unclear. The GCC will continue to try and balance its relationship with the US whilst deepening institutional ties with China as the competition between the US and China intensifies. The US and GCC have historic ties both in energy and security cooperation, and earlier this year, the US signed an MOU with Saudi Arabia to secure access to the Kingdom’s estimated USD 2.5 trillion of critical mineral resources. But as the US seeks to dissuade GCC states from engaging further with the US’s great power rival, it remains unclear whether the US would risk jeopardising this trade agreement, as well as its historic relationship and security partnerships with the GCC, over their increasing alignment with China. Punitive measures by the US, such as the recent 50% tariffs on India, seemingly backfired when India’s President Modi moved to deepen engagement with China and Russia last week.
The GCC’s interactions with the SCO are unlikely to supersede their engagements with China via its Belt and Road Initiative. However, to continue engaging with China without disruption, the GCC may choose to build on its balancing act and develop a regional strategy for navigating the great power competition between China and the US, expanding economic cooperation with the former while proactively engaging with the latter to avoid punitive retaliatory actions.
Jemima Oakey is a China-MENA research fellow at the Carboun Institute