UAE transforms from passive recipient to active global capital shaper, driving tech and green investments

According to the original report, Arshad Ghafour, who serves as Bank of America’s regional chief, mentioned during Abu Dhabi Finance Week that the UAE is no longer just a passive receiver of global capital flows. He explained that the country is actively reshaping how global capital moves by developing networks, institutions, and knowledge systems that will shape cross-border economic links for the next decade or so.

Ghafour pointed out that the size and strategic direction of the UAE’s sovereign wealth funds and public investment vehicles are key to this shift. “The UAE has become one of the most influential investors worldwide,” he noted, mentioning that sovereign funds oversee roughly $3 trillion in assets. Plus, in March, the UAE and the U.S. announced a joint investment plan stretching over ten years, valued at $1.4 trillion, focusing on artificial intelligence, advanced manufacturing, data infrastructure, and clean energy. He described this as an “unprecedented sovereign commitment,” aiming to influence future global sectors.

These strategic moves are already visible through high-profile partnerships, like the collaboration between G42 and Microsoft aimed at fast-tracking the UAE’s digital transformation. The companies state they will add 200 megawatts of data center capacity, expected to be operational by late 2026, which is part of Microsoft’s broader $15.2 billion investment in the UAE. These projects exemplify Ghafour’s main point: capital deployment is increasingly tied to infrastructure buildup and technology transfer.

Bank of America’s analysis, which the report references, forecasts UAE real GDP reaching around 2.1 trillion dirhams in 2025, up from about 1.8 trillion in 2024, a growth rate of roughly 4%. Importantly, more than 75% of that GDP is projected to come from non-oil activities, marking the highest non-oil contribution in the country’s 54-year history. Non-oil sectors like trade, logistics, finance, services, manufacturing, and tech are seeing around 5% growth, signaling a deep-seated shift in the economy’s foundations.

Ghafour emphasized that these trends are not just temporary or cyclical. He argues they stem from decades of strategic planning, consistent policies, and targeted investments. Examples include creating a ministerial role dedicated to artificial intelligence, sovereign funds directing money toward advanced computing and data infrastructure, and investments in renewable energy and green hydrogen. “These investments are the engines driving long-term competitiveness,” he explained. And he pointed out that Bank of America’s research links spending on physical infrastructure, digital capacity, and human resources with more resilient and sustainable growth.

This strategy isn’t confined within national borders, either. Ghafour described the UAE as the largest source of foreign direct investment into Africa, around $200 billion, with about a third of that aimed at green energy. He cited recent major deals to show the reach and depth: the transformation of Aligned Data Centers into a private entity valued at around $40 billion, ADNOC’s €15 billion acquisition of Covestro, and Mubadala Capital’s roughly $12 billion takeover of CI Financial. He said these transactions highlight how extensive and significant UAE-linked capital is on the global stage.

Back at home, Ghafour spotlighted the evolution of the UAE’s capital markets as a key pillar. He mentioned that by mid-2025, Abu Dhabi Global Market had issued over 11,100 active licenses and seen a 42% year-on-year rise in assets under management. He also spoke about partnerships with international asset managers like BlackRock and Apollo, which he said provide liquidity, governance standards, and institutional legitimacy. Additionally, Dubai International Financial Centre hosts about 8,500 active firms employing over 50,000 specialists, managing assets exceeding $1 trillion.

For those involved in climate and clean-tech sectors within the UAE, the signs of impact are quite tangible. The large pools of investible capital, buoyed by clear government backing, can speed up the deployment of renewables, hydrogen, and carbon management infrastructure. Ghafour pointed out that a significant portion of outward capital is intentionally allocated toward green projects in Africa and other regions. Data supports that matching capital with local project development can cut project timelines and help scale low-carbon manufacturing.

Of course, not everyone is convinced. While the UAE promotes itself as a facilitator of capital and technological flow, critics warn that rapid scaling needs to be matched with better regulation and clear environmental and social standards. Some voices in financial and sustainability circles have expressed concern over the concentration of power, when a few large funds and state-backed entities dominate capital flow. Others, however, believe that effective state coordination can help de-risk early-stage, capital-heavy projects, particularly in the energy transition and cutting-edge technology.

Ghafour acknowledged that geopolitics complicates global capital flows but saw this complexity as an opportunity for those nations capable of bridging gaps in supply of capital, talent, and technology. He noted that because of its strategic position, geographically at the crossroads of Europe, Asia, and Africa, the UAE is naturally placed to serve as a conduit for international capital. “The UAE has become a hub where global capital isn’t just flowing, it’s being engineered,” he pointed out.

For policymakers and private investors interested in climate tech within the UAE, the message is pretty clear. The country’s deeply embedded investment ecosystem, backed by sovereign wealth and strengthened through strategic partnerships with major tech firms, can accelerate the rollout of clean energy and digital infrastructure. Expect faster project pipelines, bigger investment checks, and more cross-border deals integrating finance, tech, and logistics, helping to scale low-carbon solutions across different regions.

Source: Noah Wire Services