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Cop28 must deliver on promises

25 October 2023

Commentary
Jennifer Aguinaldo
Energy & technology editor

 

There is a good chance that the average delegate attending the 2023 Conference of the Parties of the UN Framework Convention on Climate Change (Cop28) will skip visiting or driving past the key clean energy installations in the UAE.

These include the wind turbines on Sir Baniyas Island, 9.5 kilometres (km) off Jebel Dhana in Abu Dhabi; the $29bn Barakah nuclear power plant in Al-Gharbia, close to the border with Saudi Arabia; the solar farms in Sweihan and Al-Dhafra in Abu Dhabi; and Dubai’s Mohammed bin Rashid al-Maktoum Solar Park, 50km from Expo City, the venue for Cop28.

For many delegates, a trip to these sites is unnecessary. They are aware of the UAE’s green credentials, with the country having ploughed billions of dollars into investments aimed at decarbonising its economy, and more still to come.

For others, however, a single statistic undermines the positive environmental steps that the world’s sixth-largest crude exporter has taken. State-backed energy firm Abu Dhabi National Oil Company (Adnoc) plans to increase its oil production capacity from 4 million barrels a day (b/d) to 5 million b/d by 2027.

Double-edged strategy

Critics, who include the head of the Catholic Church, Pope Francis, have warned of the dangers of a double-edged energy transition strategy. Cop28 president-designate Sultan al-Jaber, managing director and CEO of Adnoc, prefers to describe such an approach as pragmatic.

An agreement requiring developed countries to provide loss and damage funding to countries most affected by climate change was a key takeaway from last year’s UN climate change conference in Egypt (Cop27). However, there was a lack of progress on the phasing down or out of fossil fuels.

The onus is now on the UAE, whose energy transition approach embraces energy sources from fossil fuels to green hydrogen, to deliver a more productive conference.

The hope is that the UAE’s status as an oil- exporting country, and the selection of an oil industry stalwart to lead this year’s negotiations, will not distract from the important tasks that the 12-day event aims to tackle.

Cop28 will see the first global stocktake of the progress countries have made towards their emissions reduction commitments or nationally determined contributions (NDCs).

Al-Jaber has also promised to supercharge climate finance and put more pressure on developed countries to fulfil the commitment they made at Cop15 in Copenhagen to mobilise $100bn annually by 2020. This target has been missed repeatedly.

A UAE finance initiative that will provide $4.5bn to help unlock Africa’s clean energy potential was announced in early September and is an example of such commitment.

Al-Jaber’s insistence on putting oil and gas companies at the heart of the climate dialogue is proving both decisive and divisive, however, depending on which side of the climate debate one supports.

“This is your opportunity to show the world that, in fact, you are central to the solution,” he told the oil and gas-dominated Adipec conference held in Abu Dhabi on 2-5 October.

How can green ammonia compete with grey ammonia if the gas for the grey ammonia is provided at a fraction of world market prices?
Cornelius Matthes, Dii Desert Energy

Cyril Widdershoven, global energy market analyst at Netherlands-based consultancy Verocy, supports Al-Jaber’s views. 

“The main Cop28 outcome will be linked to an even and rational transition from hydrocarbons to renewables, taking into account the overall need to cut emissions and [carbon] footprint,” he says. 

The summit will lead to a realisation that hydrocarbons will be a major part of the overall energy scene for decades to come, as the world is not yet ready to be fully electrified, Widdershoven adds.

The oil and gas industry’s increased presence at, and participation in, Cop28 is expected to make an impact.

“There will be huge pressure on the oil and gas industry to participate in the decarbonisation of energy systems, first by eliminating methane flaring and then eliminating emissions from their own operations by 2030,” says Paddy Padmanathan, co-founder and vice-chairman of clean energy firm Zhero and former CEO of Saudi utility developer Acwa Power.

“Abu Dhabi can influence the national oil companies to sign up to this, and Adnoc and Saudi Aramco should be able to influence the international oil companies to sign up.”

Top 10 UAE clean energy projects

Walking the talk

The UAE has shown leadership by being the first country in the Middle East and North Africa (Mena) region to initiate the phasing out of fossil fuel subsidies in 2015, Cornelius Matthes, CEO of Dubai-based Dii Desert Energy, tells MEED. 

“It was also the first Mena country to introduce a net-zero 2050 target in 2021, and has an unparalleled track record in building some of the largest solar plants in the world at record-low prices.”

Since other countries in the region have already followed the UAE’s lead, the expectation is for Cop28 to provide impetus for similar initiatives to accelerate.

With Abu Dhabi leading, Zhero’s Padmanathan expects it will also be possible to secure financial commitments
to the Loss & Damage Fund that was established at Cop27.

A declaration from the world’s 46 least-developed countries cited a “strong outcome operationalising the new Loss & Damage Fund” among their key expectations and priorities for Cop28.

Home to more than 14 per cent of the world’s population, these countries contribute about 1 per cent of emissions from fossil fuels and industrial processes and most are on the front line of the climate crisis. The majority need funds to deal with the impact of climate change in sectors such as agriculture, while others require funds to develop clean energy sources. 

Tripling initiative

The goal of tripling global renewable energy capacity is expected be included in the agenda for Cop28.

This is in line with the International Energy Agency’s recommendation that the world needs to triple global renewable energy capacity by 2030 if the 1.5 degrees Celsius cap on global warming that was agreed in Paris in 2015 is to still be within reach.

However, this goal needs a clear mechanism to be effective, according to an expert in the renewable energy field.

“There will be a big song and dance around the commitment to tripling solar and wind deployment by 2030, but given there will be no mechanism for holding anyone responsible for it, and for sure there will be no consequence … I cannot see how meaningful such pledges can be,” the expert tells MEED.

Hard issues 

The wider Mena region, which will share the spotlight and scrutiny associated with Cop28, will have to demonstrate a willingness to talk about the reduction of all harmful emissions, not only carbon, says Matthes.

The easiest option is to phase out fossil fuel subsidies, as they encourage energy waste and profit wealthy populations disproportionately.

“How can green ammonia compete with grey ammonia if the gas for the grey ammonia is provided at a fraction of world market prices?” Matthes asks.

Introducing a cost for all harmful emissions is another opportunity that can automatically improve bankability for energy transformation projects. To their credit, the UAE and Saudi Arabia have recently introduced voluntary carbon markets, which are seen as steps in the right direction.

Initiatives to boost energy efficiency across the Mena region should also be part of the conversation. These range from efforts to use air conditioning, cooling and water more discriminatingly; electrify transportation; deploy battery energy storage systems; and increase the decarbonisation of the production, shipping, refining and upstream use of oil and gas.

“The region’s waste of energy should be reduced and eliminated before even thinking about how to produce energy,” says Matthes.

Possible scenarios

Despite promises of inclusivity and productiveness, there is a strong probability that most Cop28 negotiators will get only a fraction of what they hope to take away from the summit.

“In a complex system like the Cop negotiations, we need to be realistic about what can be achieved,” says Matthes. “As we have seen in the past ... the same countries always manage to dilute compromises and block long-overdue and necessary developments.”

A likely post-Cop28 scenario could include an agreement requiring the oil and gas industry to do and spend more to decarbonise their products and operations, share in the financial burden of climate change mitigation, and if possible, curb production. This could avoid the use of wording that proved contentious at Glasgow’s Cop26 when a deal that called for the “phase out” of coal-fired power had to be amended to “phase down” following pressure from some countries. 

Climate change advocates will have to live with the fact that fossil fuels, and their entire supply chain, are not likely to be penalised further or disappear. Major change is unlikely until the world is ready to be fully electrified, or until the fear that halting oil production could cause energy insecurity and economic chaos can be overcome.

The Global North countries will have to weigh the best options to reach their net-zero carbon emission targets by 2050 without risking their economic growth. However, countries such as the UK are in the process of pushing back some of their energy transition targets.

Meanwhile, most Global South countries will continue to bear the brunt of the worsening climate crisis, albeit with some support from top carbon-emitting and wealthy nations.

Rightly or wrongly, this could highlight the merit of Al-Jaber’s preferred pragmatic and inclusive approach to Cop28 in terms of technologies, fuels and the representation of sectors.

“A convergence of interests and the dramatic changes to the status of the global energy transition over the past few years … could help countries find new momentum and solutions that might not have seemed feasible in the past,” says Matthes.

Image: Cop28 president-designate Sultan al-Jaber engages with Pope Francis on driving positive outcomes for climate action. Credit: Cop28

https://image.digitalinsightresearch.in/uploads/NewsArticle/11210573/main.gif
Jennifer Aguinaldo

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    This package also includes: Saudi real estate to surge in 2026
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    Saudi Arabia’s real estate market continued to gather momentum at the Cityscape Global 2025 event, with a record SR237bn ($63.1bn) of deals signed.

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    Although the deals signed at the event signalled a modest increase in dollar terms from the $61bn reported in 2024, they underline a steady increase in commitments to Saudi Arabia’s wider ecosystem of tourism, healthcare, logistics and supporting infrastructure schemes.

    A large share of the $63.1bn is tied to the development of housing and residential communities, reflecting continued policy support for home ownership and urban expansion. Tourism- and infrastructure-related agreements also featured heavily.

    NHC signings

    The headline of the event was the series of agreements worth billions of dollars signed by Saudi Arabia’s National Housing Company (NHC) with many local and international firms.

    The company signed two agreements worth over SR8.5bn ($2.2bn) for the development of two mixed-use and residential communities in Riyadh. The first agreement, worth over SR5.2bn ($1.4bn), was signed with local developer Retal Urban Development Company for a total of 4,839 residential units in the Al-Fursan suburb of Riyadh.

    The other contract, worth over SR3.3bn ($880m), was signed with a joint venture of Egypt’s Hassan Allam Holding and local developer Tilal Real Estate for a mixed-use project in the Khozam district. The development will cover over 228,000 square metres (sq m).

    The headline of the event was the series of agreements … signed by Saudi Arabia’s NHC

    NHC also signed an investment agreement worth over SR1bn ($266m) with Turkiye’s Emlak Konut to develop residential communities within the Mecca Gate project in Mecca. Emlak Konut will develop 1,000 residential villas.

    A SR2.64bn ($702m) partnership agreement was also announced with Egyptian real estate developer Mountain View to launch a residential project in the Al-Fursan suburb in Riyadh. The development will span 930,000 sq m and comprise 1,923 units.

    NHC also signed agreements with local developers. It inked a deal with Ledar Company to develop over 930 units within the Dar Makkah project in Wujhat Bawabat, Mecca, valued at SR899m ($240m), and another with Dar Wa Emaar Company for 2,843 units in Wujhat Al-Fursan, worth more than SR3.3bn ($879m). 

    A deal with Ezdihar Real Estate will deliver a further 1,120 units in Wujhat Al-Fursan, valued at over SR880m ($234m).

    NHC also announced a SR600m ($160m) deal with Al-Omar Investment to develop 14,000 residential units at the Dama Al-Mashriqya project in East Riyadh. 

    A SR525m ($140m) contract was awarded to local firm Zaid Alhussain & Brothers Group for infrastructure works in the Khuzam area north of Riyadh, while Saleh Abdulla Almahana Company secured a SR651m ($173m) contract to build 1,290 units for the Rose House project in Al-Ahsa.

    NHC also awarded Riyadh-based Alomaier Trading & Contracting Company a contract to carry out infrastructure works at its Khuzam residential development in Riyadh. The scope of work covers all infrastructure works across an area of 4 million sq m.

    NHC also announced the construction of 1,085 villas within the Al-Ghoroub project in Medina.

    More announcements

    NHC’s signings were complemented by further deals announced by major developers and government entities.

    > Diriyah: Saudi gigaproject developer Diriyah Company awarded two construction contracts with a combined value of over SR5.7bn ($1.5bn) on the sidelines of the event.

    The first, valued at about $800m, was awarded to the local BEC Arabia Contracting Company for the construction of offices in the Media and Innovation district of the Diriyah development. Within the same district, BEC Arabia will also build residential assets on the Manazel Al-Hadawi plots.

    The other contract, estimated to be worth $900m, was awarded to local firm Almabani General Contractors for the main construction works on King Khalid Road.

    > King Salman Park: The King Salman Park Foundation, Ajdan Real Estate and Sedco Capital announced a partnership agreement to build a SR3.8bn ($1bn) mixed-use real estate project within King Salman Park in Riyadh. The project will feature over 600 residential units, 200 hotel rooms, 45,000 sq m of office space and retail and service facilities covering 106,000 sq m.

    > Urubah Investment: Local firm Urubah Investment unveiled a 53-floor residential and commercial tower in Riyadh’s Al-Yasmin district, with a built-up area of 160,000 sq m.

    > Zood Real Estate: The firm announced the launch of a 10-tower mixed-use project on Riyadh’s Northern Ring Road.

    > Ajdan Real Estate: The developer launched the Ajdan Infiniti complex and signed a financing agreement with Alawwal Bank. It also launched the Ajdan Towers project in Riyadh.

    > Masar: Jeddah-based Masar sold three plots of land in its Masar Destination in Mecca for the construction of residential and hotel towers, with investments reaching SR1.6bn ($426m). It also signed an agreement for two plots for the development of two residential towers, with investments exceeding SR1bn ($266m). 

    Masar also signed a land sale deal for a 500-unit hotel tower, with total investments exceeding SR1bn ($266m), and a SR700m ($186m) land reservation agreement with Al-Diyar Al-Arabiya to develop a 300-unit residential tower.

    > Mohammad Al-Habib: The developer launched a $1.3bn mixed-use project in the north of Riyadh.

    > Al-Awaly: Jizan-based firm Al-Awaly announced signing a contract to establish Jazan Water City on an area of 114,000 sq m with an investment value of SR200m ($52m).

    > Alothaim: The firm announced the launch of three mixed-use projects in Dammam, Medina and Khamis Mushait.

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    > Saudi Real Estate Refinance Company: The firm signed an agreement with Al-Rajhi Bank to purchase two real estate financing portfolios worth SR10bn ($2.6bn).

    > Osus Real Estate: The developer launched two mixed-use projects in the Al-Malqa and Al-Qayrawan districts of Riyadh, with a total investment of about SR3bn ($800m).

    > Liwan Real Estate: The firm launched a 151,300 sq m project comprising 2,500 residential units, along with a hotel, offices and commercial facilities, at an investment of SR4.5bn ($1.2bn).

    > Kooheji Developments: The firm launched a three-tower development with 1,250 units, located in Al-Khobar.

    > Bank Albilad: The bank launched a SR4.4bn ($1.1bn) fund to develop a mixed-use project in the Qurtuba district of Riyadh.

    > SAB Invest: Together with Dallah Health and Aljazira Capital, SAB Invest will develop medical, commercial and hotel facilities near Dallah Al-Nakheel Hospital in Riyadh at an investment of SR1.2bn ($319m).

    > Heyazah: The firm announced a mixed-use project spanning 103,000 sq m in the vicinity of King Salman Park in Riyadh.

    > Riyad Capital: The investment company launched a SR1.7bn ($453m) fund to develop the One Mountain View project, featuring over 500 villas in the north of Riyadh.

    > Al-Basateen: The developer launched the Al-Basateen Tower project at the intersection of Riyadh’s Northern Ring Road and King Fahd Road.

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    This package also includes: Investors focus on residential sector for new deals
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    Over time, if enforcement is seen as consistent and predictable, the white land tax could help normalise more active land markets and support the private sector’s expanded delivery role. But 2026 is likely to be a transitional year, with a mix of opportunistic sales, legal challenges and recalibrated land valuations.

    The government has also intervened directly in the rental market, most notably with a rent freeze in Riyadh. 

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    For tenants, the freeze offers immediate relief and increases predictability, particularly for middle-income households and small businesses exposed to volatile rents. It also serves as a counterweight to fears that opening the market to foreign buyers in 2026 will drive another surge in rental prices.

    For investors and developers, however, the impact is more challenging. Compressed rental growth in Riyadh reduces the upside on income-producing assets, especially where financing structures assumed steady nominal increases. 

    Running alongside these regulatory reforms is a quieter but significant development in real estate finance: the launch of Saudi Arabia’s first residential mortgage-backed securities by PIF subsidiary the Saudi Real Estate Refinance Company. This new asset class aims to enhance liquidity in the housing finance market and diversify investment opportunities.

    In the longer term, a thriving, diversified real estate sector underpinned by such instruments can support the development of a broader ecosystem of mortgage issuers, servicers and investors, reducing systemic risk and broadening access to housing finance.

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  • Navigating financial markets amid geopolitical fragmentation

    28 December 2025

     

    As we move towards 2026, geopolitical fragmentation is no longer a background risk that occasionally disrupts markets.

    It has become a defining feature of the global financial landscape. Shifting alliances, persistent regional tensions, sanctions and the reconfiguration of supply chains are reshaping how capital flows, how liquidity behaves and how confidence is formed.

    For firms operating in the Middle East, this does not simply mean preparing for more volatility. It means operating in a system where the underlying rules are evolving.

    For much of the past three decades, businesses and investors worked within a broadly convergent global framework. Trade expanded, financial markets deepened and policy coordination – while imperfect – created a sense of predictability. That environment has changed.

    Today, economic decisions are increasingly influenced by strategic alignment, security considerations and political resilience. Markets still function, but they do so in a more fragmented and less forgiving way.

    Shifting landscape

    One of the most important consequences of this shift is that risk no longer travels along familiar paths. In the past, geopolitical events were often treated as temporary shocks layered onto an otherwise stable system.

    Today, they shape the system itself. Trade flows are influenced as much by political compatibility as by cost efficiency. Supply chains, once optimised for speed and scale, are reorganising into regional or allied clusters. Financial markets respond not only to data, but to narratives about stability, alignment and long-term credibility.

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    This matters because funding costs, liquidity availability and hedging conditions are shaped by global rather than local forces. When US policy remains tight, dollar liquidity becomes more selective. When expectations shift abruptly, market depth can disappear quickly.

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    When shifts in energy expectations coincide with changes in global interest-rate sentiment, liquidity conditions can tighten rapidly. This interaction is well known in academic research on fixed exchange-rate systems, but its practical implications are often underestimated in corporate planning.

    Expanding vulnerabilities

    These dynamics expose clear vulnerabilities. Concentrated supply chains are more susceptible to disruption. Financing structures dependent on continuous market access are more exposed to sudden repricing. Risk management approaches that assume stable relationships between assets are more likely to disappoint. Operational risks – particularly in technology and data – are increasingly shaped by geopolitical considerations rather than purely technical ones.

    At the same time, the region enters 2026 from a position of relative strength. GCC economies benefit from fiscal buffers, long-term investment programmes and a growing perception of stability compared to other parts of the world. In an environment where uncertainty is widespread, predictability itself becomes valuable. Capital increasingly seeks jurisdictions that combine economic ambition with institutional credibility.

    The question, therefore, is not whether opportunities exist, but whether firms are prepared to capture them responsibly. This requires a shift in how future risks are assessed and embedded into decision-making. Linear forecasts and static plans are insufficient when the environment itself can change state. Scenario thinking must evolve beyond optimistic and pessimistic cases to reflect different combinations of geopolitical alignment, monetary conditions, and supply-chain stability. These scenarios should inform capital allocation, not sit in strategy documents.

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    Operational resilience must be viewed through the same lens. Supply-chain redundancy, cybersecurity preparedness and data governance are no longer purely operational concerns. They influence financial stability, investor confidence and regulatory trust. In a fragmented world, operational disruptions can quickly translate into financial and reputational damage.

    Facing the future

    As we approach 2026, leadership in the Middle East faces a clear test. The global environment is unlikely to become simpler or more predictable. Firms that continue to rely on assumptions shaped by a different era will find themselves reacting rather than positioning. Those that invest in disciplined risk management, flexible planning and operational resilience will be better placed to navigate uncertainty and to turn volatility into strategic advantage.

    In this environment, risk management is not an obstacle to growth. It is the framework that makes sustainable growth possible.

    Ultimately – and this is an often overlooked critical point – none of these adjustments, whether in scenario planning, liquidity discipline, or operational resilience, can be effective without the right human capital in place. 

    Geopolitical fragmentation and financial volatility are not risks that can be fully addressed through models or policies alone. They require informed judgement, institutional memory and the ability to interpret weak signals before they become material threats or missed opportunities. 

    Firms that succeed in this environment will be those that deliberately invest in corporate knowledge: building internal capabilities where possible and complementing them with external expertise where necessary. This means involving professionals with the right background, cross-market experience and a proven, proactive approach to risk awareness and governance. 

    In a fragmented world, competitive advantage increasingly depends not only on capital or strategy, but on the quality of people entrusted with understanding risk, challenging assumptions and guiding decision-making under uncertainty.

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