Is China Set to Dominate the Middle East’s Green Energy Future?

By Nikola Mikovic

An increasing number of Middle Eastern countries are seeking to strengthen cooperation with China in various areas, including sustainable energy. As a leader in the green energy transition, Beijing can offer the regional actors not only investment but also know-how and extensive experience. How will Chinese-Middle Eastern collaboration in this sector look in 2025?

The People’s Republic is the leading producer and exporter of various energy products including solar modules, lithium batteries, and electric vehicles (EV). It is, therefore, no surprise that the China Machinery Engineering Corporation built the Al Dhafra Solar PV Plant near Abu Dhabi. Spanning 21 square kilometers (8.1 square miles), this facility is the world’s largest solar power plant on a single site, with an installed capacity of 2.1 gigawatts. Mothana Qteishat, Jinko Power’s vice president, told Scoon TV in an interview,

Before entering the Middle Eastern market, many people were laughing at us because we decided to do the solar business in oil-rich countries.

This Shanghai-based company is part of a consortium that also includes French energy giant EDF Renewables and the United Arab Emirates state-owned renewable energy corporation Masdar. They jointly lead the management of Al Dhafra. Masdar now plans to build a new solar and battery energy facility that will deliver 1 gigawatt of uninterrupted clean power.

The construction of the plant, in the desert near Abu Dhabi, is expected to cost $6 billion. If everything goes as planned, it will become fully operational by 2027. Meanwhile, Masdar will continue its cooperation with China, even though the company seems to have abandoned its ambition to enter the Chinese market.

China is not the core market for us. There is significant domestic and local competition there that doesn’t necessarily make us very competitive,

Abdulaziz Alobaidli, the corporation’s chief operating officer, told Scoon TV. Although the UAE’s major renewable energy corporation is focusing on expanding its business in the United States, rather than in China, the Gulf nation is expected to continue strengthening green energy ties with Beijing. The fact that, on January 12-18, dozens of Chinese renewable energy companies participated in the Abu Dhabi Sustainability Week – a platform aimed at inspiring global efforts to achieve sustainable energy solutions – clearly shows that the People’s Republic will continue to play a major role in the region’s green energy transition.

China as an Essential Partner

According to Australian research group Climate Energy Finance (CEF), China’s international investments in clean energy technology have surpassed $100 billion since the start of 2023. The Griffith Asia Institute in Australia estimated that Chinese companies were involved in green energy projects across the Middle East worth approximately $9.5 billion between 2018 and 2023. Also, by 2024, China and the fossil-fuel rich region had forged dynamic cooperation in green energy, fitting Middle Eastern nations’ aspirations to diversify their economies with China’s expertise in renewable technologies.

Compared to other countries, China has taken decisive action toward adopting new energy. Fifteen years ago, when you landed at the airport in Beijing, the pollution was so severe that you could barely see anything. Today, China is a leader in the green energy transition, and air quality has significantly improved,

Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA) told Scoon TV in an interview. As such, Beijing has managed to establish itself as an essential partner in the Gulf states’ energy transitions. As the global leader in solar power and EV production, China is well-positioned to support the Middle East in its renewable energy pursuits.

For instance, in October 2024, Chinese EV leader NIO debuted its EL8 electric SUV in the United Arab Emirates. The Chinese company has previously secured a $1.1 billion investment from Abu Dhabi investment firm CYVN Holdings to “strengthen its balance sheet and support business growth.” The joint venture now plans to introduce NIO’s vehicle models and establish a research and development center focused on AI-driven technologies, notably autonomous driving.

Moreover, the UAE – as a regional leader in decarbonizing its power sector with solar and wind – is expected to be a major partner in China’s ambitions to export its green technologies to the Middle East. Other regional actors also aim to strengthen green energy ties with Beijing, hoping that such a strategy will help them foster a transition to sustainable energy.

The Middle East or The Gulf?

From the Middle Eastern perspective, China is a desirable partner in the green energy sector, given that it can offer solar cells, electric vehicles, and lithium-ion batteries to the region. The problem, however, is that the Chinese corporations operating in the oil-rich Gulf states do not plan to expand their business to other Middle Eastern nations in the near future.

At this point, their core market will remain fossil-fuel rich Gulf countries such as the UAE, Oman, and Saudi Arabia. Although IRENA, according to La Camera, is ready to help rebuild Syria, Lebanon, and Gaza “in a sustainable way”, Chinese and Gulf green energy corporations seem rather hesitant and cautious. The lack of infrastructure and regulatory frameworks in the region, in their view, are the major reasons why, at this point, they remain focused on other markets.

Masdar, for instance, sees Europe and the United States as its major green hydrogen export destinations rather than Middle Eastern states. When it comes to the expansion of its solar business, the company sees inadequate green energy policies and political instability as the major obstacles to the mass construction of solar power plants in the Middle East.

Jinko Power seems to share Masdar’s views. According to Mothana Qteishat, for the time being, the Gulf region will remain the Chinese company’s core market, while only in the next decade might it focus on the Middle East and North Africa. Other Chinese corporations appear to have adopted the same strategy, investing mainly in the Gulf.

In Oman, the Power Construction Corporation of China (POWERCHINA) corporation built the Ibri Solar Power facility, the largest renewable energy project in the country. Also, Chinese company Hainan Drinda New Energy Technology plans to construct a factory for the production of solar photovoltaic cells – non-mechanical devices that convert sunlight directly into electricity – in Oman.

In Saudi Arabia, Chinese companies Jinko Solar and TCL Zhonghuan, together with their Saudi partners, plan to invest over $3 billion in projects that aim to localize solar manufacturing and help translate the Kingdom into a global hub for renewable energy exports. China is also expected to build a 2 gigawatt (GW) solar power plant, worth $972 million, in the largest country on the Arabian Peninsula.

The fact that Chinese Premier Li Qiang visited Saudi Arabia and the United Arab Emirates in September 2024, heading a delegation including executives of China’s top renewable energy companies, and that the UAE joined BRICS in August 2023, suggests that the green energy cooperation between China and the oil-rich Gulf states will continue to grow in 2025. In the long term, however, Beijing will almost certainly seek to strengthen renewable energy ties with other regional nations as well.

From the Chinese solar panel producers’ perspective, the Middle East – receiving 22-26% of the total solar energy on Earth – is undoubtedly a very attractive market for expansion. Given that clean energy was the top driver of China’s economic growth in 2023, the People’s Republic undoubtedly can play an important part in the region’s energy transition.

However, it remains to be seen how the new American administration will react to Beijing’s ambitions.