Gulf Investors Plug Into Solar Projects in Egypt, Jordan, and Morocco
Gulf financiers and sovereign wealth funds have increasingly invested in solar energy projects across the Middle East and North Africa region in recent years. These projects demonstrate the efforts by the member states of the Gulf Cooperation Council to diversify income streams and reduce reliance on oil revenues. They also serve as instruments of soft power, reinforcing the GCC states’ regional influence.
National strategies such as Saudi Arabia’s Vision 2030 and ‘We the UAE 2031’ highlight the importance of economic and energy diversification. In this context, solar energy investments position GCC states as key actors in both regional and global energy transitions.
Gulf sovereign wealth funds are channeling investments into solar projects through companies including ACWA Power (part-owned by Saudi’s Public Investment Fund), Masdar (financed by Abu Dhabi’s Mubadala), and AMEA Power, a notable privately financed player based in Dubai. ACWA Power, Masdar, and AMEA, have established a prominent presence in MENA countries such as Egypt, Morocco, and Jordan—each offering distinct opportunities and challenges for solar energy development.
In Egypt, solar energy has emerged as a rare enclave of prosperity within a struggling economy. A steady influx of internationally financed, large-scale solar energy projects—particularly in the Aswan governorate—have allowed the country to diversify its energy supply considerably. These investments support Egypt’s target of achieving 42 percent of its energy from renewables by 2030.
The major GCC renewable energy players have a strong presence in Egypt. AMEA Power owns and operates a 500 MW PV solar plant in Egypt's Kom Ombo. Masdar holds a 230.6 MW share of Egypt’s 1.8 GW Benban Solar Park, while ACWA power operates 120 MW in Benban and 200 MW in Kom Ombo.
One of Egypt’s principal advantages lies in its ability to attract backing from international financial institutions, thus reducing developers’ reliance on payments from state-owned entities. Labour costs are also comparatively lower, as local hiring minimises expenses related to travel, accommodation, and immigration.
However, Egypt also faces significant challenges. These include currency instability, tough import controls, as well as difficulties around profit repatriation. On the ground, solar projects, most of which are located in Upper Egypt, reportedly encounter demands for payment to local groups from contractors working at the sites.
Despite these issues, Egypt’s PV sector has a bright outlook. A Masdar-led consortium recently signed a landmark agreement to develop a further 1.2 GW of solar capacity in the country. Moreover, Egypt’s energy links to Europe further enhance its energy strategy. Notably, a 2000 MW high-voltage subsea cable is expected to connect Egypt to Cyprus by 2028-29, with another planned link to Greece scheduled for completion by 2030.
Further west, Morocco has emerged as a regional powerhouse for solar energy, attracting large projects which have drawn significant Gulf-based investment and participation from renewable energy companies. Its flagship project, the four-phase Noor Ouarzazate Complex, boasts a total capacity of 580 MW. ACWA power has been involved in the first three phases of this project. Similarly, AMEA power has three smaller projects spread across Morocco’s Atlantic coast including Taroundant (36 MW), Tangier (34 MW), and El Hajeb (36 MW). While Masdar does not currently own any solar energy plants in Morocco, it has entered a partnership with the National Office of Electricity and Drinking Water (ONEE) to provide solar electricity to more than 19,000 homes. Though smaller in scale than AMEA and ACWA’s ventures, this project lays a robust foundation for future public-private initiatives.
A main benefit of working in Morocco’s favor is the country’s unified renewable energy framework, managed by the Moroccan Agency for Sustainable Energy (MASEN). This agency facilitates land acquisition, permits, and state guarantees, thereby streamlining project development and reducing credit risk for investors. Morocco’s cogent institutional framework has compelled various international initiatives, specifically the X-links interconnector project, which plans to export renewable energy to the UK via a subsea cable.
Nonetheless, Morocco’s regulatory landscape presents certain difficulties. Workforce nationalisation laws are more stringent in Morocco than in Jordan or Egypt, requiring international developers to hire local engineers and project managers. This requirement represents a significant challenge for contractors operating under tight deadlines, as it limits their flexibility in staffing important technical positions. Procurement can also be hampered by protectionist measures that mandate local content in public tenders, presenting a hurdle for solar projects in particular, given the need to import many PV components.
Morocco’s prospects for growth are relatively stable. The country is targeting a 52 percent share of renewables in its energy mix by 2030 and is on track to meet benchmarks of 2.7 GW solar capacity in 2027 and 2.97 GW by 2028. However, easing nationalisation requirements and loosening local content restrictions could further boost Morocco’s competitive edge in the regional renewables market.
Jordan, too, has seen meaningful contributions from the major GCC renewable energy companies. The country’s largest solar project, the 200 MW Baynouna plant, was developed by Abu Dhabi’s Masdar. ACWA Power operates two 50 MW sites at Mafraq and Risha, while AMEA Power owns a 50 MW plant in Ma’an.
Although Jordan’s solar sector is smaller than those of Egypt or Morocco, it has seen steady growth in recent years. The country benefits from a relatively stable economy and a business-friendly environment, with favourable conditions for currency convertibility and profit repatriation. Labour costs in Jordan are higher than in Egypt but remain lower than in the Gulf, allowing developers to hire locally without incurring additional expenses for travel, accommodation, or work visas.
Jordan has imposed a 35 percent local content requirement for utility-scale solar projects in 2018. However, this decision was implemented in a business-friendly manner, allowing businesses to fulfil this requirement by partnering with a local contractor, even if the materials are sourced internationally. The country continues to position itself as an open and accessible market for international renewable energy investors.
A core financial incentive of establishing solar power plants in Egypt, Jordan, and Morocco for GCC investors is the significantly lower levelised cost of electricity compared to the Gulf states. This is largely attributable to lower labour costs. In Egypt and Morocco in particular, economies of scale are also helping to drive costs down. PV installation is a time-sensitive sector in which profitability depends on efficient project execution. Thus, sourcing labour locally not only helps to avoid delays, but also eliminates the considerable costs associated with maintaining an idle workforce in the Gulf—where developers typically bear the various expenses of each project phase.
While obstacles such as profit repatriation, local content restrictions, and import restrictions persist, the overall trajectory of all three markets remains positive. National energy strategies in Egypt, Jordan, and Morocco increasingly prioritise a greater role for renewables, and governments are generally supportive of foreign direct investment in this sector.
In the context of the United States’ retreat from various international financial institutions and commitments, GCC sovereign wealth funds have a unique opportunity to shape the global energy transition. By continuing to finance and implement projects beyond their own borders, GCC states can secure a critical role in global energy politics well into the post-oil era.
Photo: MASEN
