The United Arab Emirates has unlocked a $1 billion programme to rebuild Yemen’s devastated electricity system, marking one of the largest targeted energy interventions in a conflict-affected state in recent years. The investment, to be delivered through Abu Dhabi-based Global South Utilities, introduces a long-term infrastructure push built around solar, wind and distribution upgrades aimed at stabilising power supply.

After nearly three decades of decline and a decade of war, Yemen’s grid has reached near collapse, forcing households, hospitals and businesses to rely on expensive diesel generation. The new portfolio represents a rare infusion of patient capital into a sector critical to economic recovery. GSU confirmed it will build renewable generation while also reconstructing distribution lines and substations damaged by conflict, ensuring new capacity can reach consumers.

The UAE has already demonstrated impact with its solar plant in Aden, now one of the country’s most important civilian assets. Solar made up just over 10 percent of Yemen’s generation in 2023 but is set to rise sharply as the second phase of the Aden project completes in 2026. The new $1 billion commitment aims to scale this further, prioritising regions facing severe shortages that have constrained essential services and local industries.

The strategy also signals a broader shift in regional energy diplomacy, as Gulf states increasingly use renewable infrastructure to shape stabilisation efforts in fragile territories. For investors, the move reinforces a growing trend: solar and wind projects are becoming the most viable entry point for reconstruction due to fast deployment, modular financing and insulation from fuel-supply risks.

Governance challenges remain, with Yemen’s political fragmentation posing risks to implementation. However, the use of a single executing entity may streamline delivery and reduce operational bottlenecks.

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