Rising temperatures, prolonged droughts, increased flooding and water scarcity are undermining agricultural output, supply chains, energy systems and investment decisions across the region. For governments, lenders, exporters and project sponsors, climate resilience has now become a central component of economic security, infrastructure planning and long-term growth.
MENA sits at the centre of this transition. Countries across the region see the utility in diversifying their energy mix beyond hydrocarbons through scaling renewable energy to meet ever-increasing demand for electricity. These countries are also addressing the inter-connected challenges of water and food security and secure value chains. These projects require substantial long-term financing and strong risk mitigation structures to achieve bankability and attract private capital. This is where export credit insurance, political risk insurance, reinsurance and credit enhancement can help unlock climate-resilient development.
A region of strategic opportunity
Many ICIEC Member States have programmes in renewable energy, water security, transport and logistics, food systems and industrial diversification. With the MENA region having renewable energy corridors, desalination infrastructure, green hydrogen projects and a regional logistics network, it is poised to be one of the most important markets for trade credit and investment guarantees over the coming decade. These projects often involve long maturities, require international partners and sovereign-backed counterparties. In many cases, there is a high perception of risk, which raises financing costs and limits private sector participation.
ICIEC, as a multilateral insurer, offers credit enhancement instruments that help reduce the cost of lending, whilst its risk mitigation covers non-payment risk for financing parties and project sponsors due to commercial and political risks, making transactions and projects more viable overall. The result is greater participation by international and regional banks, stronger trade resilience and more diverse sources of long-term capital providers for various sectors that are crucial to climate adaptation and green growth.
Where de-risking is needed most
The strongest de-risking needs are concentrated in the water-energy-food nexus, a central pillar of MENA’s resilience agenda. Renewable energy projects, including solar, wind, waste-to-energy, and both blue and green hydrogen, require long-term financing and dependable offtake arrangements. Desalination, water reuse and sanitation infrastructure are capital intensive and often benefit from credit enhancement. Climate-resilient irrigation systems and localised agricultural value chains are crucial to reducing food import volatility and supporting rural economies.
Sustainable transport, green industry and climate-resilient urban infrastructure and social infrastructure also require substantial de-risking support. The same is true for trade in essential goods and services. Emerging carbon markets may become another area where insurance and guarantees provide market stability as regulatory frameworks mature. Across these sectors, ICIEC’s role is not only to support capital mobilisation but also to improve project bankability by reducing commercial and non-commercial risks that might otherwise keep lenders and investors on the sidelines.
ICIEC’s mandate and instruments
ICIEC is a member of the Islamic Development Bank Group and the only multilateral insurer operating exclusively on a Shariah-compliant basis. Its mandate is to facilitate trade and investment among Member States through Shariah-compliant export credit insurance, political risk insurance, reinsurance and credit enhancement tools. These instruments enable banks, investors, exporters, contractors and sovereign-backed entities to manage payment default, currency transfer restrictions, expropriation and breach of contract as well as non-honouring of sovereign obligations in long-term projects with a transboundary investment element. In practice, ICIEC helps direct capital toward projects and trade corridors that might otherwise struggle to secure financing.
A track record anchored in climate-relevant business
ICIEC’s track record shows how risk mitigation can support sustainable development at scale. Since ICIEC’s inception in August 1994, cumulative business insured has reached $138.9bn, including $17bn in 2025 alone. These figures underline the ICIEC’s continuing relevance as Member States seek to mobilise capital for development and resilience.
MENA represents ICIEC’s largest regional footprint. Total business insured in Member States located in MENA stands at about $110.9bn, nearly 80% of ICIEC’s overall portfolio since inception. Approximately $100bn relates to trade and $10.8bn channelled to inward and outward investment. This concentration reflects both the scale of economic activity in the region and strong demand for Shariah-compliant, development-oriented risk mitigation solutions.
Over the past decade, engagement in climate-related sectors has expanded significantly. ICIEC has supported clean energy projects since its inception, with $6.8bn insured for a renewable energy mix, including solar, wind and waste-to-energy. ICIEC has also facilitated $1.42bn in clean water and sanitation projects and $7.7bn in non-energy green projects between 2015 and 2025. Regional examples supported by ICIEC include political risk insurance for equity investors in the Benban Solar Complex in Egypt, which was the largest project of its kind; reinsurance for two wind farms in Turkiye; reinsurance support for the Sharjah Waste-to-Energy Facility; and major reinsurance support for the Riyadh Metro construction project under Saudi Arabia’s Vision 2030.
ICIEC’s developmental impact goes beyond sectoral coverage. In 2025 alone, ICIEC de-risked transactions and projects worth $450m of private sector capital, supported over 294000 jobs and enabled 5,998 small and medium-sized enterprises to access essential goods and services. ICIEC also supported with $889m in coverage for social infrastructure and $408m in other key social development categories, as reported for the year. These outcomes and positive momentum encompasses climate-resilient trade and investment, which will translate into tangible benefits for people, businesses and the planet. The ICIEC Climate Change Policy continues to embed climate considerations in underwriting, risk management and impact assessment, whilst membership in global partnerships such as IRENA’s Energy Transition Accelerator Financing Platform (ETAF) synergises the origination of green projects by connecting key stakeholders.
Challenges that warrant honest reflection
Scaling climate-related insurance in MENA holds great potential and necessitates de-risking solutions. In some markets, project pipelines remain thin and feasibility studies do not always meet international lender standards. Long tenors combined with currency convertibility and transfer risks can complicate structuring. Regulatory uncertainty, evolving carbon markets, limited climate-risk data and uneven local insurance and reinsurance ecosystems also continue to slow progress.
The water-energy-food nexus also demands more innovative coordination. Governments, multilateral development institutions, export credit agencies, reinsurers, financiers, investors and project sponsors need to work together more deliberately. None of these barriers are insurmountable; overcoming the challenges requires a more integrated public-private approach.
Practical pathways forward
Several practical steps could accelerate climate-resilient trade and investment. Multilateral insurers, export credit agencies, reinsurers, development banks and private insurers can embed and systemise risk-sharing arrangements to expand capacity and extend cover. Better project planning and preparation and stronger feasibility work would improve bankability earlier in the project lifecycle. Credit and political risk insurance and credit enhancement structures can crowd in private capital where its patrons are hesitant to commit.
Progress also depends on stronger climate finance ecosystems. It is important to coordinate national diversification strategies, local and regional reinsurance capacity, enhanced climate-risk data and objective impact measurement in a more optimal manner. More widely accepted regional frameworks for carbon trading and green investment would also reinforce market confidence. An overarching objective should be to connect risk mitigation solutions offered by ICIEC and peers, public-private partnerships in renewable energy, water, agriculture and transport, and to increase awareness of how insurance and guarantees can make projects viable.
Conclusion
Scalable capital alone will not deliver MENA’s climate transition. The MENA region needs effective institutional partnerships and risk management tools as well that can turn climate ambition into bankable, resilient and development-oriented projects. ICIEC’s role is to reduce the barriers associated with commercial and political risk in a way that catalyses trade and investment flows within a development-focused and Shariah-compliant framework. As Member States accelerate climate adaptation and energy diversification efforts, de-risking instruments will play an increasingly important role in mobilising effective capital, strengthening investor confidence and delivering impact at scale across the region. M
Dr Khalid Khalafalla is CEO of The Islamic Corporation for the Insurance of Investment and Export Credit.