The UAE has secured the top spot as the most funded country for climate tech ventures in the Middle East and North Africa (MENA) and Turkiye region, receiving $401 million or 62% of the total venture funding across 45 deals between 2018 and 2022, according to a report by MAGNITT.
Turkiye and Saudi Arabia followed with $124 million and $68 million, respectively, in climate tech funding.
The last two spots went to Egypt ($42 million) and Tunisia ($6 million) over the past five years, the research firm said in “The State of Climate Tech” report.
Over the past five years, the region has witnessed a significant surge in venture capital (VC) activity, amassing $651 million in funding across 225 deals. Currently, climate tech accounts for 5% of total VC funding, signifying 11-fold growth since 2018.
A further $40 million in climate tech funding was invested in the first half of 2023 as the UAE gears up to host COP28 later this year.
Across the MENA region, venture funding for the climate tech sector has grown gradually, reaching its peak in 2022 at $270 million.
Climate tech recorded a mega deal of $181 million via a convertible note by Abu Dhabi-based Pure Harvest Smart Farms in 2022. The deal captured 67% of the year’s total funding.
Dubai’s Yellow Door Energy closed a PE buyout deal valued at $400 million through primary and secondary transactions. Actis, a global investment firm, led the funding round and was joined by existing shareholders.
The horticulture sector saw the highest amount of venture funding at $288 million, followed by renewable energy at $118 million, MAGNITT said.
Meanwhile, renewable energy was ranked first by deals (39) between 2018 and 2022, accounting for 17% of total transactions in the MENA and Turkiye region. The farming sector followed at 55 transactions during the period.