Saudi Arabia, UAE Drive GCC Greenfield Investments Amid Project Value Decline

Saudi Arabia dominated as the primary destination for foreign direct investment (FDI), accounting for 54% of the total project value, followed by the UAE with a 36% share. However, the average project value declined, with the total value of projects falling 26% year-on-year.

The key FDI sources into the GCC in 2024 were the US (25%), China (17%), the UK (9%), and India (9%). The UAE also contributed 5% to greenfield FDI projects in other GCC countries. The most significant sectors were communications (18%), renewables (14%), metals (8%), electronic components (8%), and coal, oil, and gas (8%).

Saudi Arabia’s greenfield project value dropped 28% year-on-year to nearly $22 billion but remained the third highest on record. The kingdom aims to attract $100 billion in FDI annually by 2030 through reforms such as allowing 100% foreign ownership, a new bankruptcy law, and equal treatment of foreign and local firms. A major highlight was Amazon Web Services' $5.3 billion investment in data and innovation centers.

In the UAE, greenfield project values fell 33% year-on-year to $14.5 billion, normalizing after a strong 2023. Dubai attracted 58% of these investments, followed by Sharjah (12%) and Abu Dhabi (11%). Major industries included real estate, software & IT, renewables, coal, oil & gas, business services, and automotive manufacturing.

Globally, FDI flows declined in both value and volume in 2024. UNCTAD estimates show an 8% drop in the number of announced greenfield FDI projects and a 7% decline in value. However, developed economies saw a 15% rise, mainly driven by a 93% surge in US projects and a 32% increase in the UK, while developing economies experienced a 24% drop.

The UAE featured in two of the top 10 global greenfield projects, including ADQ’s real estate investment in Egypt’s Ras El-Hekma and Mubadala’s semiconductor manufacturing investment in the US. Despite the decline in total project value, greenfield investments remain high by historical standards, supported by large-scale semiconductor and AI technology projects.