Skip to content Skip to Search
Skip navigation

Mena climate tech offers opportunities for investors

There are innovative ways to produce energy and improve lives without accelerating the climate crisis

A Husk Power employee stands next to solar panels at the company's minigrid in Kiguna, Nasarawa, Nigeria Thomson Reuters Foundation
Investing in companies such as Husk Power, which generates energy from rice husks, can benefit the planet and provide returns

Climate tech hits a sweet spot for investors. As a sector, it has a strong focus on environmental, social and governance factors (ESG), while it is at an early stage when it comes to exploring the potential of technology. 

And critically, climate tech offers opportunities for significant financial returns married with social impact.

Let’s be honest, there are still many investors who care more about financial returns than impact. But monetary gain and positive impact don’t have to be mutually exclusive – as long as you invest in the right companies.

The flagship product of Abu Dhabi-based FortyGuard, for example, harnesses AI to provide high-resolution heat maps and data analysis. The company argues that we cannot change what we cannot measure.

Flat6Labs, also based in Abu Dhabi, says it is the Middle East and North Africa (Mena) region’s leading seed and early stage VC firm, and has run several cohorts of climate tech startups.

Elsewhere, Catalyst Investment Management, based in Jordan, specialises in climate infrastructure and technology. 

Leading the way

The Frontier Technologies Readiness Index 2023, released by the United Nations, ranked the UAE as the top Arab country ready to adopt advanced technologies such as artificial intelligence with a focus on green innovation.

A total of $651 million was invested in climate tech across Mena and Turkey between 2018 to 2022, according to research from startup data platform Magnitt.

Climate tech startups in the UAE attracted about two-thirds of total funding, accounting for $401 million – equivalent to 62 percent of total regional investment during the five-year period.

Turkey came in second with $124 million, or about 19 percent of all deals, followed by Saudi Arabia with $68 million (10 percent), Egypt with $42 million (7 percent) and Tunisia with $6 million (1 percent), the report said.

The importance of AI

As elsewhere, much excitement surrounds AI adoption. Predictive analytics, data analysis and machine learning unlock advantages by incorporating back-end deep learning technology. Preventative measures can now be made through alerts and early detection in areas such as floods, carbon emissions and forest fires. 

The need is urgent. Mena is warming twice as fast as the rest of the world, according to the IMF. What’s more, the region is home to 12 of the planet’s most water-stressed countries, says the World’s Resources Institute. Removing CO2 is essential if we are to limit global warming.  

But there are pools of capital available to support innovation. For example, The Rockefeller Foundation has committed to investing more than $1 billion dollars into climate tech globally over the next five years.

It is important to look for funds that already have a specific investment thesis in climate tech, if you are not sure where your money will make the most impact. 

Although many climate tech discussions focus on energy, there are actually four systems that are essential to the wellbeing of the planet and its people: agriculture, health, finance and energy. 

Around 3.6 billion people lack sufficient access to affordable, reliable electricity. This challenge is labelled “energy poverty”. But the good news is that there are innovative ways to produce energy and improve peoples’ lives without accelerating the climate crisis. 

As an example, I was an early patron of the Acumen Fund, a global nonprofit changing the way the world tackles poverty by investing in sustainable businesses, leaders and ideas.

In 2020 Acumen invested in Husk Power. Its equipment converts rice husks into combustible gases, which then drives a generator to produce electricity. These technologies were focused on providing energy to rural areas of India.

We need to empower local entrepreneurs to support their communities against climate adversity.

As investors, we are not doing this because it is a “good” thing to do (although that in itself is a laudable reason to invest in climate tech startups) but because many innovations are scalable and can easily be utilised in other emerging markets.

Lucy Chow is secretary general of the Dubai-based World Business Angels Investment Forum and general partner of the WBAF Angel Investment Fund

Latest articles

Mubadala injects $250m to revive Turkey’s Getir

Abu Dhabi’s Mubadala Investment Company will invest $250 million in Turkish grocery delivery startup Getir as part of a restructuring programme that will split it into two standalone units. The first standalone business will focus on domestic online groceries and food delivery services, with Mubadala, an existing shareholder, holding the management and majority stake, Reuters […]

Machine, Architecture, Building

Arabian Mills gets nod to sell 30% stake on Saudi bourse 

Arabian Mills for Food Products will list 15.4 million shares, or a 30 percent stake, on the Saudi stock exchange, the kingdom’s market regulator has said. The Capital Markets Authority (CMA) approved the company’s public floatation application on Monday, adding that the prospectus will be published before the subscription start date. No other details of […]

Properties overlooking the bay in Muscat. Property prices in the capital fell more than 5 percent

Oman’s real estate sector continues to slide

Apartment prices in Oman dropped more than 17 percent in the first quarter of 2024, while villa prices rose a meagre 0.8 percent, according to the latest government figures. Residential real estate prices were down across the board quarter on quarter, including those for land. The Musandam region recorded the largest overall decline at 15.7 […]

Shoppers choose vegetables in Istanbul; inflation means people are spending on essentials

Turkish retailers’ confidence wavers as inflation bites

Confidence is falling among Turkish retailers, according to a survey from the country’s statistics agency Turkstat. Shoppers have been scaling back on big-ticket purchases, spending instead on basic consumer goods as inflation piles pressure on household incomes. May’s business confidence report, released by Turkstat on June 24, showed sentiment in the retail sector at its […]