Middle Eastern countries have either shown interest in or secured deals worth at least $6 billion in African energy assets in recent weeks, showing the region’s growing investment appetite on the continent.
- Middle Eastern countries are investing $6 billion in African energy assets.
- Gulf states diversifying oil and gas portfolios in Africa to buffer against market volatility.
- Saudi companies like ACWA Power and Red Sea Gateway Terminal investing in South Africa’s renewable sector.
Middle Eastern countries have either shown interest in or secured deals worth at least $6 billion in African energy assets in recent weeks, showing the region’s growing investment appetite on the continent.
Among the key players is Abu Dhabi National Oil Co. (Adnoc), which was recently shortlisted to acquire Shell Plc’s downstream assets in South Africa, valued at around $1 billion, according to sources familiar with the matter.
Adnoc and other UAE-based firms have expressed strong interest across Africa’s energy spectrum, from renewables to oil fields, Bloomberg reported.
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This surge in engagement comes as Gulf states scale up their energy investments in Africa, with bilateral trade between Africa and the UAE rising 38% to $86 billion over two years through 2023, per an African Export-Import Bank report.
Middle East eyes investment opportunities
Gulf nations are increasingly diversifying their oil and gas portfolios by acquiring assets abroad to buffer against market volatility and regional disruptions.
Alpha MBM Investments LLC, a Dubai-based private investment firm led by a member of the emirate’s royal family, signed a deal with Uganda to build a 60,000-barrel-per-day refinery.
According to a March 30 statement from Uganda’s presidency, Alpha MBM will hold a 60% stake in the $4 billion project, the latest attempt to monetize the country’s landlocked crude reserves after several failed initiatives.
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In a similar move, Kenya has renewed its fuel import agreement for another two years with Adnoc, Saudi Aramco, and Emirates National Oil Co., a deal credited with helping stabilize the Kenyan shilling.
Some of the imported fuel is re-exported to neighbouring countries such as South Sudan, the Democratic Republic of Congo, and Burundi.
A wave of high-level engagements between Saudi Arabia and South Africa over the past year has resulted in multibillion-dollar deals, with more corporate activity on the horizon.
Saudi firms like ACWA Power and Red Sea Gateway Terminal, backed by the kingdom’s $925 billion sovereign wealth fund, are actively investing in or bidding for assets in South Africa’s renewable energy sector.
With a 44% stake in ACWA Power, Saudi Arabia has emerged as the largest investor in South Africa’s renewables, according to Standard Bank Group.
