The Middle East and North Africa region (MENA) stand at a crossroads. For decades, the region’s economies have been anchored in hydrocarbons. Yet a new growth engine is emerging: industrialization powered by cheap green electrons (renewable electricity) and cheap green molecules (such as green hydrogen, ammonia, and synthetic fuels). 

With some of the best solar and wind resources in the world, MENA countries can generate low-cost clean energy at scale. Harnessing that energy to support the growth of industries such as steel, aluminum, fertilizers, clean fuels, and advanced manufacturing offers a once-in-a-generation chance to diversify economies, capture global markets, and create millions of jobs.

Shifting from Extraction to Production

MENA countries face mounting climate and economic pressures. More than 60% of the region’s population already lives under severe water stress, and rising temperatures threaten agriculture, tourism, and public health. At the same time, the global energy system is shifting. Major economies, including the European Union, Japan, and China, have committed to net-zero pathways, creating rising demand for low-carbon industrial inputs.

The MENA region is uniquely positioned to respond. According to the International Renewable Energy Agency, the region could obtain a quarter of its total primary energy supply from renewables by 2050, while the renewables share could exceed 50% in the power sector. Recent projects in Saudi Arabia and the UAE have produced some of the world’s cheapest solar electricity. These cheap green electrons enable the production of hydrogen and its derivatives at globally competitive costs.

Crucially, the region also has substantial industrial bases. The region accounts for 45% of global production of direct reduced iron (DRI), a technology that can be adapted to run on hydrogen instead of natural gas. Aluminum smelters and petrochemical complexes in the Gulf and fertilizer producers in Morocco and Egypt are all energy-intensive and export-oriented, and could gain from switching to low-cost green energy inputs.

Natural Assets, Strategic Position

Three structural advantages position MENA countries to lead this transition:

1. Exceptional Renewable Resources. MENA receives roughly a quarter of the world’s solar energy, and about 75% of its land is suitable for utility-scale wind farms. Solar irradiation in the Sahara, Arabian Peninsula, and Levantine deserts is among the highest globally, and onshore wind corridors in Morocco, Oman, and Egypt rank in the world’s top tier. This resource endowment allows the region to generate clean electricity and hydrogen at costs that competitors in Europe and Asia cannot match. For instance, a recent solar farm project was won in Saudi Arabia at a record low cost of 1 cent per kilowatt-hour, far below the global average.

2. Industrial Infrastructure: The MENA region’s ports and industrial zones are already integrated into global trade. The Suez Canal handles about 12% of world trade and nearly 30% of container traffic, connecting Asia and Europe. Dubai’s Jebel Ali Port is the busiest in the Middle East and among the top ten globally, serving as a major transshipment hub. Morocco’s Tangier Med Port Complex is the largest in Africa and the Mediterranean and maintains direct maritime connections to over 180 ports across 70 countries globally.

3. Financial Firepower: The region is home to sovereign wealth funds that collectively manage more than $5 trillion in assets, concentrated largely in the Gulf through institutions such as Saudi Arabia’s Public Investment Fund, Abu Dhabi’s Mubadala and ADQ, and the Qatar Investment Authority. These funds are now deploying capital to diversify economies and back emerging low-carbon industries. Their ability to make long-term, patient investments allows them to de-risk first-mover projects in hydrogen, green steel, and advanced manufacturing while crowding in global investors.

These advantages enable the region’s transition not just to a clean energy exporter, but to a hub for green industrial value chains attracting international investment, and further integrating the MENA region into global supply chains.