The water-energy-food nexus presents special challenges and opportunities for financial sector stakeholders in the Arab region, given the large inequalities in access to resources, the scarcity of water and – in many parts of the region – arable land.

The interconnected nature of these three factors reflects an opportunity for financial sector leaders to engage in more sustainable planning in the way natural resources are used and how SDG-aligned projects and companies are financed.

Water is used throughout the regional agri-food chain, from agricultural production to fishing and forestry. In parallel, the agri-food chain consumes about 30% of total energy globally, as energy is required to produce, transport and distribute food and to extract, pump, collect and distribute water.

The same factors driving energy demand in the Arab region will also increase demand for water and food, as populations grow, living standards rise, mobility increases, and societies move towards more sophisticated technologies.

Investors and the financial sector stakeholders discussed above all have an opportunity to finance positive change at the nexus of food, water, and resource efficiency.


Climate change has emerged as one of the most important factors exacerbating poverty and human insecurity in the Arab region. Managing climate risk is key to maintaining regional financial and political stability.

This stability is required for finance to flow into the investments and infrastructure required to achieve the SDGs. As part of the process of enhancing regional stability, climate finance must be scaled up in a way that boosts local prosperity and achieves tangible impacts across the SDGs.

Additional climate finance can support pre-existing public finance by mobilizing private finance, international financial institutions, impact investors, Islamic finance, philanthropists, crowd-funding, and other forms of innovative finance in a coordinated manner.


The 2030 Agenda for Sustainable Development and the SDGs mark a turning point in development policy globally and in the region. By achieving the SDGs in the Arab region, an era of climate disruption will be possible if countries and communities are able to anticipate, shape and adapt to this new driver of change.

Climate change is inextricably linked to all the SDGs: In taking action on SDG7 (access to clean energy) and 13 (resilience to natural hazards and disasters), Arab countries and their global peers can also support success on:

  • SDG 1 on poverty,
  • SDG 2 on food security,
  • SDG5 on women’s empowerment,
  • SDG6 on access to water,
  • SDG10 on inequality,
  • SDG15 on land and ecosystems,
  • SDG16 on peace and security, among others.
Expanding finance for the energy transition in the Arab Region:
  • Expanding finance for the energy transition needed in the Arab region requires a better understanding of how climate action can serve as a catalyst for achieving all of the SDGs alongside crisis prevention/recovery goals.
  • Nexus points to be prioritized to enable local solutions will be the nexus between the water-energy-food nexus (SDGs 2, 6, 7), and the nexus between SDG5 on gender equality, SDG7 on energy access, SDG13 on resilience to natural disasters and SDG16 on justice and strong institutions.
The nexus of climate change and displacement:
  • The nexus of climate change and displacement is particularly important, with growing resource insecurity converging with and exacerbating challenges of conflict and displacement.
  • Lack of access to energy is a barrier to stability and recovery for those displaced by conflict, and for the resilience of communities hosting them.
  • Local energy security is a vital element to address poverty and human security in the Arab region, with low-carbon solutions emerging as among the most cost-effective solutions for the poor.
Food & Water Security:
  • Food security is an important investment theme across the region which is the world’s largest net importer of cereals
  • Agricultural yields, especially in rain-fed areas, are expected to fluctuate more widely over time and lead to lower long-term averages as populations continue to grow.
  • Water security is also being critically affected by climate change. The Arab region receives rainfall well below the world average with the average person accessing just one-eighth the renewable water that the average global citizen enjoy.
    The fragility of land and ecosystem services is also seeing major impacts from climate change.


Climate change has emerged as one of the most complex and important factors exacerbating poverty and human insecurity in the Arab region. Climate change amplifies existing challenges of water insecurity, falling agricultural productivity, fragile land and ecosystem services. As a result, climate change is generating social vulnerability, exacerbating existing internal and international conflicts and adding to the region’s refugee and human displacement crisis.

Most of the conflict-affected contexts in the Arab region are also some of the world’s top climate risk hotspots. This means that the adoption of more climate-resilient development models is key to both crisis prevention and recovery. The Arab region contributes around 5% of global emissions. However, the impact of climate change on the fragile environment of the region and its people is expected to be immense, which demands urgent planning for adaptation measures.


The region is large and diverse with abundant natural resource wealth alongside climate vulnerability.

It includes 22 countries, stretching from Morocco and Mauritania on the Atlantic coast of North Africa, across Egypt, the Syrian Arab Republic, Jordan and Palestine in the Levant, or Mashreq, to Iraq, the Gulf Cooperation Council (GCC) economies and Yemen on the Arabian Peninsula.

It represents 10% of the world’s land area and is home to around 350 million people. In 2014, the region accounted for some 5% of the world’s total primary energy supply, though less than 5% of the world’s carbon dioxide (CO2) emissions and some 5% of the world’s GDP. The region’s financial wealth is heavily concentrated in the GCC and to a lesser extent the Levant and North Africa.


Traditional natural resources, including fossil fuels, are unevenly distributed in the Arab region. Countries including Iraq, Kuwait, Saudi Arabia and the United Arab Emirates (UAE) are large oil producers with sufficient reserves of oil and gas to continue production at current rates far into the future. These countries’ primary interest has historically been in the stability of global demand and pricing for their fossil fuels. Neighboring Oman and Qatar also have large natural gas reserves, and smaller oil reserves, with Qatar being the world’s second-largest exporter of gas.

Libya is a globally significant fossil fuel producer, although almost a decade of civil war continues to dent output. Smaller fossil fuel exporters including Algeria, Egypt, the Syrian Arab Republic and Yemen are more focused on short-term profit maximization and the diversification of their economies in the medium term away from oil and gas. Jordan, Morocco, Palestine and Tunisia are net importers of energy and have been most directly affected by rising energy prices on international commodity markets during the 2000s. As a result, these countries have embraced the clean energy transition and serve as a model to their peers who continue to rely heavily on fossil fuels in their respective national energy systems.