Investment in Middle East renewable energy projects rose 28 per cent last year as the region pushed ahead with large-scale infrastructure and grid development designed to support rising energy demand, according to a new report from Ansarada.
The 2026 Renewable Energy Infrastructure Outlook Report, produced with Infralogic, said global investment in renewable projects reached $496bn, driven in part by the surge in AI compute requirements.
Renewable energy investment in the Middle East reached $12.9bn in 2025, up from $10.1bn in 2024.
Based on a survey of 150 senior executives across APAC, EMEA and the Americas, the report shows the Middle East emerging as a strategic growth market, with 25 per cent of respondents identifying it as a top destination for renewable investment.
As Western markets contend with grid congestion and permitting delays, the report says the region’s sovereign-backed development model allows “rapid supply chain mobilisation and bankable pipelines” that avoid the grid-connection bottlenecks seen in Europe and North America.
The report highlights the region’s integrated delivery model, which develops renewables and transmission infrastructure in parallel. “The Middle East demonstrates what’s possible when projects are designed and delivered holistically,” said Justin Smith, MD at Ansarada.
“Building renewables and transmission together represents a fundamentally different approach than the fragmented delivery model common in Western markets,” Smith added.
AI-driven power demand to contribute to growth in the renewables sector
AI-driven power demand is adding to the pressure. With more than $500bn in AI infrastructure capital expenditure forecast for 2026 and US data centre energy use projected to reach 409 TWh by 2030, 37 per cent of global respondents and 36 per cent in EMEA cited AI compute requirements as the main driver of new renewable development.
The UAE’s emergence as a regional AI hub is expected to increase demand for integrated renewable and storage systems capable of supporting compute-intensive operations.
“AI compute demand is the single biggest driver of new renewables development,” Smith said.
The report shows battery storage becoming core infrastructure, with 34 per cent of EMEA respondents expecting strong growth in large-scale systems. But it also points to operational and financial pressures, with 44 per cent of respondents in EMEA citing macroeconomic uncertainty and high interest rates as key concerns.
Despite high adoption of procurement technology, the report identifies persistent fragmentation in project delivery. While 91 per cent of respondents use purpose-built procurement software, organisations still rely on an average of three to four disconnected systems, and 55 per cent continue to use email for sensitive bidder communication. “Organisations think they’ve digitised, but they’ve actually created a ‘Frankenstack’ of disconnected tools,” Smith said.
Only 37 per cent of respondents globally said their most recent procurement process was “very efficient”, falling to 8 per cent in EMEA and 29 per cent among government agencies. Although most said their internal processes were transparent, 43 per cent acknowledged limited clarity for external stakeholders, raising the risk of disputes.
ESG requirements are becoming more embedded in procurement across the region. In EMEA, 80 per cent of respondents said ESG is deeply integrated into their processes, and 90 per cent rated transparency and auditability as very important. Without auditable ESG data, the report warns that some projects may not qualify for tendering or financing. “That integrated approach, combined with proper digital infrastructure for procurement, separates projects that deliver from those that stall,” Smith said.