PwC Middle East’s 2024 Climate Tech report highlights the shifting dynamics of climate tech investment in the region. Over the past year, US$3.6 billion flowed from Middle Eastern investors into global climate tech, a 28% decline from 2023. Investment into local climate tech ventures also dropped sharply, falling 41% to US$114 million, compared to US$193 million in the previous year. Despite these declines, key sectors, such as electric mobility and AI-driven autonomous technologies show promising growth, highlighting the region’s transformative potential in advancing climate innovation.
Mobility remains a focal point, accounting for 84% of the region’s total outward global investment. Strategic investments in EV technologies are accelerating the transfer of intellectual property, technological expertise and high-skilled jobs to the region – critical components in building a robust and resilient EV ecosystem. This focus underscores the region’s strategy of adopting proven global technologies to strengthen local capacity and technical skills within the EV industry, setting the stage for a sustainable future.
According to PwC Middle East’s eMobility Outlook 2024 report – KSA Edition, US$39 billion will be invested in Saudi Arabia between now and 2030 to establish a domestic electric vehicle manufacturing industry, aligning with the Kingdom’s ambitious net zero and economic diversification goals. Similarly, the UAE is taking proactive steps to meet its National Electric Vehicles Policy target, with demand for public charging infrastructure forecast to reach 45,000 charging points by 2035, according to PwC Middle East’s eMobility Outlook 2024 report – UAE Edition. This reflects a regional strategy not only to adopt EV technology but also to create the infrastructure necessary to sustain its growth.
Key initiatives include plans for a state-of-the-art R&D center in Abu Dhabi, dedicated to advancing autonomous driving and AI, while Saudi Arabia is actively positioning itself as a hub for EV production. These investments reflect the region’s commitment to fostering local ecosystems, creating high-skilled employment opportunities and transforming transportation to align with net zero goals. Together, these efforts are reimagining mobility and driving innovation across the Middle East.
AI-driven climate tech is another area of growth, with the Middle East investing US$2.4 billion globally in 2024, nearly 2.5 times the amount invested in 2023. Autonomous vehicles dominated these investments, accounting for 96% of this total, reflecting the region’s ambition to redefine the future of mobility. AI-related climate-tech companies in the Middle East also attracted US$47.3 million in global investments in 2024, a significant increase from the US$5.4 million raised in 2023.
The 2024 PwC Pitchbook analysis also highlights the active participation of Middle East sovereign investment funds (SIFs) in the global climate tech landscape. Although the number of unique Middle East investors declined from 98 to 47 over the past year, they collectively invested US$3.55 billion globally in 2024. Majority of these deals involved US-based innovators (21 deals), followed by UAE-based climate tech firms (15 deals), underscoring the pivotal role Middle Eastern SIFs continue to play in advancing global climate tech innovation.
However, critical funding gaps persist in high-emitting sectors like energy, industrial manufacturing and agriculture, which remain underfunded despite their decarbonisation potential. For instance, regional funding for energy-related climate tech fell to a record low of US$13 million, down from US$22 million in 2023. Addressing these gaps through targeted investments in talent development, infrastructure and homegrown innovation is essential to achieving meaningful progress.
Dr. Yahya Anouti, Sustainability Leader at PwC Middle East, commented: “Addressing funding gaps in critical sectors like energy and food systems is crucial for accelerating the region’s decarbonisation journey. At PwC Middle East, we are committed to supporting governments, businesses, universities and investors in aligning their strategies with net zero goals. By fostering innovation, scaling homegrown technologies and leveraging transformative solutions, such as AI and electric mobility, we can explore new opportunities for sustainable growth. Together, we must mobilise capital effectively to drive meaningful local and global climate impact.”
Despite a tough investment climate, the region’s strategic focus on mobility and AI reflects a growing maturity in identifying and pursuing high-impact opportunities. However, closing funding gaps in underfunded sectors and fostering innovation locally are vital to advancing net zero ambitions and ensuring long-term sustainability.
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