Saudi Arabia, UAE Lead GCC Greenfield Projects Pipeline Growth

In 2024, there was a small rise in the number of greenfield projects in the GCC (Gulf Cooperation Council), increasing by 1%. The total number of announced projects went up to 1,830 from 1,813 the previous year. This growth was led by two major countries in the region: Saudi Arabia and the UAE, as shown by a report from Emirates NBD Research.

Saudi Arabia, the biggest player in the region, secured the largest share of these projects, taking 54% of the total value. The UAE followed closely with 36% of the project value. However, the total value of these projects saw a decline of 26% compared to last year.

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Greenfield projects are investments where companies build new facilities or operations in a foreign country. Saudi Arabia remains the primary destination for these investments in the GCC. The report also mentioned that the top countries sending Foreign Direct Investment (FDI) into the region are the US (25%), China (17%), the UK (9%), and India (9%). The UAE also played an important role by contributing 5% to the total number of greenfield projects announced in the GCC.

Some of the sectors with the highest value of projects include communications (18%), renewables (14%), metals (8%), electronic components (8%), and coal, oil, and gas (8%).

In Saudi Arabia, the value of greenfield projects decreased by 28% in 2024, reaching almost $22 billion. Despite the decline, it was still the third-highest annual value for the country. Saudi Arabia has ambitious goals under its Vision 2030 plan, aiming to attract $100 billion annually in FDI by 2030. Greenfield projects will play an important part in reaching this target.

To help achieve these goals, Saudi Arabia is making several reforms. These include allowing 100% foreign ownership of companies, introducing a new bankruptcy law, and creating a law that treats both foreign and local companies equally to encourage fair competition. In 2024, the US, China, the UK, and the UAE were the main sources of greenfield investments in Saudi Arabia. A significant boost came from a $5.3 billion investment by Amazon Web Services in data and innovation centers.

The UAE, on the other hand, saw a 33% drop in the value of greenfield projects in 2024, with the total value standing at $14.5 billion. This was a return to more typical levels after a particularly strong 2023. Dubai remained the largest recipient of these projects in the UAE, attracting about 58% of the total value. Sharjah followed with nearly 12%. Abu Dhabi, which had seen large investments in renewables, the automotive industry, and the ICT sector in previous years, only accounted for just under 11% of the total value of projects in 2024.

The sectors with the most greenfield investments in the UAE in 2024 included real estate, software and IT, renewables, coal, oil and gas, business services, and automotive manufacturing.

Globally, the total value of greenfield projects declined in 2024, with both the number and value of announced projects falling by 8% and 7%, respectively. Despite this, the level of investment remained high, with several large projects related to semiconductor manufacturing and artificial intelligence.

Two of the top 10 greenfield projects by investment value came from the UAE, including a real estate investment in Ras El-Hekma, Egypt, by ADQ, and a semiconductor manufacturing investment by Mubadala in the US.

Looking at different regions, developed economies like the US and the UK saw an increase in greenfield projects. The value of announced projects in these countries rose by 15%, with the US seeing a 93% increase and the UK a 32% rise. On the other hand, developing economies faced a significant decline of 24% in the value of greenfield projects.

Overall, the greenfield investment landscape in 2024 showed a mixed picture, with Saudi Arabia and the UAE leading the GCC's growth, while global trends reflected a slowdown, especially in developing countries.

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