Money is pouring into MENA’s climate ambitions.
In 2023 alone, the region issued a record $24 billion in green, social, and sustainability bonds, a 155% jump from the previous year. Governments from the UAE to Saudi Arabia have set bold net-zero targets, committing billions to clean energy megaprojects and green infrastructure.
But when it comes to early-stage ClimateTech start-ups, the real engines of innovation, MENA’s ecosystem is still missing vital pieces.
The funding gap is real
Despite the flood of capital into large-scale projects, funding for MENA-based ClimateTech start-ups dropped sharply to just $114 million in 2024, down 41% from $193 million in 2023. Even more striking, Middle Eastern investors contributed only about $69 million of that total, representing less than 2% of their global climate tech investments.
Meanwhile, seed-stage funding across all tech start-ups in the region reached $501 million in 222 deals in 2024. That’s promising but still insufficient to fuel a robust ClimateTech innovation pipeline. The sharp drop in ClimateTech start-up funding shows capital is still favouring larger, later-stage projects and established players over early-stage innovation.
The policy–innovation disconnect
Governments have laid out ambitious climate roadmaps, like the UAE’s Net Zero by 2050 and Saudi Arabia’s Vision 2030 climate goals, and these plans drive large-scale investments. But the regulatory environment for start-ups remains patchy and fragmented.
Clear, start-up-friendly policies such as regulatory sandboxes, pilot programmes, and streamlined government procurement channels are rare. Without these, start-ups face challenges testing and scaling their solutions. Fragmented regulations across different countries further complicate scaling for regional start-ups, limiting cross-border expansion and market access.
Why early-stage innovation matters
Large renewables and infrastructure projects will take MENA only so far. The most disruptive ClimateTech breakthroughs come from start-ups solving niche, local problems—think precision agriculture, smart water management, carbon capture tech, and circular economy solutions tailored to regional needs.
Without a healthy pipeline of early-stage start-ups, MENA risks relying heavily on imported technology and partnerships that might not fit its specific climate or socio-economic contexts.
What needs to change
To unlock MENA’s real ClimateTech potential, the ecosystem must evolve rapidly:
- Boost early-stage funding: More grants, angel investors, and venture capital focused on ideation and seed phases can give start-ups the runway they need.
- Strengthen university–industry–government collaboration: Accelerate commercialisation of R&D and offer entrepreneurship programmes to retain local talent and foster innovation.
- Unify ESG and carbon accounting standards: Regional harmonisation will simplify compliance, boost investor confidence, and ease start-ups’ cross-border scaling.
- Create regulatory sandboxes and pilot testbeds: Governments should provide safe, controlled environments for start-ups to validate new tech with regulatory backing and support.
The opportunity is huge, but time is running out
MENA’s abundant sunlight, vast deserts, and urgent climate challenges make it a perfect place for solar innovation, green hydrogen, water tech, and sustainable agriculture breakthroughs. But these advantages will only pay off if the region addresses its innovation and policy gaps now.
The next wave of ClimateTech innovation depends on how well MENA supports its startups today.
Want to be part of MENA’s ClimateTech revolution?
Investors, policymakers, and founders need to step up and fill the missing links before the opportunity slips away.
The ClimateTech World Cup, held as part of CARE, offers a crucial stage for early-stage start-ups to pitch breakthrough solutions, gain exposure, and connect with investors and industry leaders. It’s exactly the kind of platform MENA’s ClimateTech ecosystem needs to close the gap between innovation and impact.
