Key Takeaways
- • Dawud Al Ansari, president of the Shaheen Institute for Strategy and Development, argues in the Carboun Institute's 2026 Dossier that Gulf sovereign wealth funds may have to finance green steel and ammonia production at existing ports and plants as foreign investors grow wary of war risk.
- • Foreign financing has slowed since Iranian strikes damaged operating data centers in the UAE and Bahrain, with financiers pausing or slowing decisions on new Gulf facilities.
- • Tim Callen of the Arab Gulf States Institute in Washington expects the conflict to affect foreign investment for a few years, leaving financing more reliant on domestic sources such as Saudi Arabia's PIF, the National Development Fund and potentially Aramco.
- • Sovereign funds hold only around a quarter of the equity behind the GCC's installed utility-scale renewables capacity, per Al Ansari's count, and are unlikely to drive a similar push into grid-scale renewables.
- • Oman's ports at Duqm, Salalah and Sohar have absorbed much of the trade rerouted from Hormuz, which Al Ansari says gives Oman a window to attract industrial investment.
Summary
Gulf sovereign wealth funds may have to finance the region's next wave of industrial infrastructure, with green steel and ammonia at existing ports and plants as the likely focus, according to Dawud Al Ansari, president of the Shaheen Institute for Strategy and Development, writing in the Carboun Institute's 2026 Dossier. He told EnterpriseAM that royal decrees rewriting the funds' mandates would be the clearest sign of such a shift.
The argument rests on a changed risk environment. Gulf states have traditionally relied on foreign companies to build infrastructure, while sovereign funds invested abroad, largely in real estate and foreign equities. The UAE attracted Amazon, Oracle and others to build large data centers, and Oman auctioned green hydrogen land blocks to foreign consortia. That model has come under strain since Iranian strikes damaged operating data centers in the UAE and Bahrain, prompting financiers to pause or slow decisions on new Gulf facilities. Al Ansari expects foreign capital to flow only where business cases hold under uncertainty.
Tim Callen, visiting fellow at the Arab Gulf States Institute in Washington, said foreign investment may be affected for a few years, leaving financing more dependent on domestic sources. In Saudi Arabia, he said, that money would come mainly from the PIF, the National Development Fund and potentially Aramco. He noted the PIF's project review has focused on real estate rather than industry, and that diversification into new industrial sectors remains a priority, though the fund is likely to tilt toward commercial returns over time.
Soroush Basirat, an energy finance analyst, said the outlook for green iron has not shifted much, but developers are waiting for clarity on the war before final investment decisions. He said Meranti's green HBI plant in Oman, expected to reach a final investment decision this year, may slip to next year. Al Ansari said Omani ports have absorbed much of the trade rerouted from Hormuz, and that Oman needs to move quickly to attract investors while attention is high. Kate Dourian, a board member of the Energy Institute's Middle East branch, cautioned that Saudi Red Sea facilities have also been hit, and that investors are pricing in higher transport, insurance and security costs, though they are not abandoning Gulf projects.
On the demand side, Al Ansari argued that green steel and cement can rely on the Gulf's own construction pipeline, unlike hydrogen, which was designed around European and East Asian buyers. He proposed domestic quotas, sovereign offtake guarantees and green procurement rules, with state-owned companies signing offtake agreements underwritten by finance ministries. He also warned that if sovereign funds converge on the same green industries, the region risks duplicating capital-intensive plants without coordination, and he suggested options including a jointly financed GCC industrial investment fund.
The argument rests on a changed risk environment. Gulf states have traditionally relied on foreign companies to build infrastructure, while sovereign funds invested abroad, largely in real estate and foreign equities. The UAE attracted Amazon, Oracle and others to build large data centers, and Oman auctioned green hydrogen land blocks to foreign consortia. That model has come under strain since Iranian strikes damaged operating data centers in the UAE and Bahrain, prompting financiers to pause or slow decisions on new Gulf facilities. Al Ansari expects foreign capital to flow only where business cases hold under uncertainty.
Tim Callen, visiting fellow at the Arab Gulf States Institute in Washington, said foreign investment may be affected for a few years, leaving financing more dependent on domestic sources. In Saudi Arabia, he said, that money would come mainly from the PIF, the National Development Fund and potentially Aramco. He noted the PIF's project review has focused on real estate rather than industry, and that diversification into new industrial sectors remains a priority, though the fund is likely to tilt toward commercial returns over time.
Soroush Basirat, an energy finance analyst, said the outlook for green iron has not shifted much, but developers are waiting for clarity on the war before final investment decisions. He said Meranti's green HBI plant in Oman, expected to reach a final investment decision this year, may slip to next year. Al Ansari said Omani ports have absorbed much of the trade rerouted from Hormuz, and that Oman needs to move quickly to attract investors while attention is high. Kate Dourian, a board member of the Energy Institute's Middle East branch, cautioned that Saudi Red Sea facilities have also been hit, and that investors are pricing in higher transport, insurance and security costs, though they are not abandoning Gulf projects.
On the demand side, Al Ansari argued that green steel and cement can rely on the Gulf's own construction pipeline, unlike hydrogen, which was designed around European and East Asian buyers. He proposed domestic quotas, sovereign offtake guarantees and green procurement rules, with state-owned companies signing offtake agreements underwritten by finance ministries. He also warned that if sovereign funds converge on the same green industries, the region risks duplicating capital-intensive plants without coordination, and he suggested options including a jointly financed GCC industrial investment fund.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.