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Saudi Arabia moved into the ranks of the world’s top 10 investors in renewable energy for the first time in 2025 as the world’s dominant oil exporter pushed ahead with plans to expand the share of renewables to 50 percent of its total energy use.
The Gulf Kingdom overtook Canada in the list of the world’s top electricity transition investors last year by pumping nearly $34 billion, the Kuwait-based Arab Energy Organisation (AEO) said in a 70-page study.
But Saudi Arabia’s investments in this sector remained a fraction of those channeled by China and the US at around $800 billion and $378 billion respectively, more than half the world’s total investments of nearly $2.3 trillion in such projects, said AEO, an Arab League establishment.
“Last year, Saudi Arabia became among the world’s 10 largest electricity transition project investors for the first time in its history after overtaking Canada,” AEO said.
It was noted that investments in renewable energy projects in the largest Arab economy leapt by nearly 70 percent year-on-year to peak at around $34 billion in 2025.
Such investments in the Kingdom, which controls the world’s second largest proven oil deposits, have steadily grown by 20-35 percent annually over the past five years, driven by global advancements in this sector and Riyadh’s determination to preserve its hydrocarbon wealth.
“Saudi Arabia is emerging as a regional example in renewable energy investments as it has laid a solid ground for expansion in renewable energy uses to 50 percent by 2030…..the Kingdom is expected to maintain a strong momentum in renewable energy investments in the coming years as part of its ambitious national renewable energy program targeting zero emissions by 2060,” the report said.
Projects pipeline expanding
In January 2026, Zawya Projects had reported that the Kingdom tendered a total of 64 gigawatts (GW) of renewable energy capacity by the end of 2025.
The report, quoting a post by the Saudi ministry of energy, said 20.6 GW of renewable energy projects were tendered during 2025 alone while 12.3 GW had been connected to the grid by the end of last year.
Nearly 30 gigawatt-hours of battery energy storage system (BESS) projects have been tendered to date, with 8 GWh connected to the grid by the end of 2025, it said.
“Saudi Arabia has set a clear goal to achieve its national renewable strategy…this goal requires huge investments which are being channeled by the government and other parties in various parts of the country,” said Jamal Banoun, director of the Riyadh-based SMS economic consulting centre.
“Of course any such major projects face challenges despite the availability of funding…they include legal frameworks for allocation of large plots of land for major projects, environment permits and compliance, connection of these projects to the national grid, and how to manage risks associated with prices,” he told Zawya Projects.
Another expert said Saudi Arabia aims to expand renewable energy sources to around 58GW by 2030 including nearly 40GW from solar.
“This will supply power to at least five million houses…this is a very large project which will allow Saudi Arabia to become a pioneering regional renewable energy centre…this sector provides great opportunities to investors,” said Nayef Al-Dandani, an oil engineering professor at King Saud University.
Risk of missing 2030 target
A separate report by GlobalData said Saudi Arabia may fall short of its target to install 130GW of renewable energy by 2030.
The report, titled ‘Saudi Arabia Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035,’ said renewable capacity stood at about 13GW by 2025. However, total capacity is expected to reach around 74.2GW by 2030, well below the official target.
In October 2025, Saudi Arabia awarded 4.5GW of new solar and wind capacity in the sixth auction round of the National Renewable Energy Programme (NREP). In September 2025, Saudi Power Procurement company (SPPC) announced the qualified bidders for the seventh round of NREP, which by January 2026 encompassed 5.3GW of combined solar and wind projects
Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, noted that support mechanisms such as net metering and renewable auctions have been fairly successful, the government needs to focus on establishing more purchase power agreements (PPAs) for large-scale renewable power plants. He said the escalation of war in the Middle East may become a key challenge for making investment decisions.
“Policy makers need to overcome this challenge in order to achieve the country’s renewable target,” he added.
(Reporting by N Saeed; Editing by Anoop Menon)
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