Investing in energy-efficient buildings could yield enormous economic benefits for countries across the MENA, according to new research from the BUILD_ME initiative.

The analysis, which focused on Egypt, Jordan, and Lebanon, found that for every €1 spent on energy efficiency today, governments and consumers could see returns of up to €7 in the future.

The study identified 14 distinct co-benefits linked to energy-efficient buildings, including reduced energy bills, improved public health, job creation, and lower emissions.

Using just five indicators like energy cost reductions, healthcare savings, improved indoor comfort, lower public subsidies, and employment growth, the analysis projected significant macroeconomic gains.

Egypt stands to benefit most from investing in energy-efficient construction, with potential savings exceeding €18 billion.

These gains would stem from reduced electricity consumption, fewer pollution-related health issues, and greater productivity among workers.

Lebanon’s projected savings are even higher, at around €23 billion, driven largely by cutting energy bills in residential buildings, lowering emissions, and decreasing reliance on diesel generators.

Jordan, while showing more modest figures, could still save approximately €2.5 billion by reducing electricity demand and improving air quality in buildings.

“Egypt, Jordan, and Lebanon offer a snapshot of a much larger trend unfolding across MENA,” according to Donatas Karčiauskas, CEO of Exergio, a company developing AI-powered tools for optimising energy use in commercial buildings.

“We see similar dynamics in Oman and other Gulf countries, where extreme temperatures, growing cities, and strained energy systems are forcing to rethink how buildings are designed, renovated, and managed.”

This growing focus on energy efficiency in the region is not just an environmental imperative, but also a strategic response to rising energy demand, extreme temperatures, and the mounting climate crisis, according to Karčiauskas.

Governments across the Middle East and North Africa are now backing these efforts with new policies that promote greener, more sustainable construction.

In Egypt, revised energy efficiency standards for common household appliances such as air conditioners and televisions came into effect in January 2024, signalling a shift toward stricter regulation.

Jordan has launched its Third National Energy Efficiency Action Plan (2024–2026), building on previous efforts to reduce consumption across multiple sectors.

Lebanon, meanwhile, has introduced the Lebanon Green Building Council, which plays a key role in promoting sustainable building practices.

The urgency of this shift is clear. Buildings in Egypt, Jordan, and Lebanon are among the largest consumers of energy and contributors to carbon emissions, accounting for between 20% and 35% of each country’s total CO₂ output.

In addition, poor air quality stemming from inefficient housing continues to impose a heavy financial and health burden, costing governments and citizens billions every year.

But the opportunity is equally substantial. If just 30% to 50% of new residential and commercial complexes were constructed according to energy-efficient standards, the region could cut more than 80 million tonnes of CO₂ emissions, save upwards of €20 billion in energy costs, and generate close to 200,000 jobs over the next 20 years. 

“The projected numbers mean that we need to scale energy-efficient construction rapidly and strategically. Prioritising digital retrofits can unlock immediate energy savings at lower costs, while targeted deep renovations should focus on the highest-impact buildings. For MENA, a hybrid approach will be needed, but eventually, all buildings will have to optimise energy using AI tools due to the amount of data,” said Karčiauskas.

One real-world example of how AI-driven solutions can accelerate energy efficiency comes from Exergio’s work with the Ozas shopping centre in Lithuania.

By analysing the building management system and integrating real-time HVAC controls with machine learning capabilities, Exergio was able to optimise the centre’s energy use. The result: a 29% drop in electricity consumption and a 36% reduction in heating demand, translating into nearly €1 million in cost savings.

According to Karčiauskas, this kind of outcome is only the beginning. 

"In MENA countries – where high temperatures, year-round cooling needs, and energy subsidies shape the market – the potential is even greater. Faster payback periods, higher baseline consumption, and a growing push for smart solutions make this region one of the most promising places for large-scale energy efficiency gains," said Karčiauskas.

A report by Betterhomes suggests that the base 10% tariffs on the UAE levied by the Trump administration are unlikely to affect UAE industries 

While the 25% tariffs imposed by the US on these key materials have created global uncertainty, Dubai’s diversified economy, robust trade infrastructure, and status as a re-export hub significantly cushion it from potential negative impacts.

In 2024, the UAE exported 350,000 tonnes of aluminium to the United States, making it the second-largest aluminium supplier to the American market. However, this relationship is unlikely to be substantially undermined by the tariffs. Unlike Canada and Mexico, the UAE has not been exempted from duties. Yet, the ongoing political engagement between the US and Gulf states signals room for bilateral negotiations, especially as the US looks to reduce dependence on Canadian imports.

Strategically, this opens a potential opportunity for the UAE to expand its aluminium exports to the US. Should a bilateral trade deal materialise, it could not only secure preferential access for Emirati aluminium but also strengthen the UAE’s role in global metal supply chains, particularly in sectors like aerospace, automotive, and defence.

Besides, the UAE’s domestic aluminium industry remains strong and well-positioned. With the US announcing a US$1.4tr investment in its own aluminium smelting capacity, future demand could shift more towards domestic consumption, but the high-quality aluminium produced in the UAE will likely remain competitive.

On the steel front, the US tariffs may trigger cost increases in international markets, but Dubai’s construction sector seems to be protected for now. As the UAE is not directly subject to reciprocal import duties on construction materials, price volatility will more likely be driven by currency fluctuations and shipping costs rather than trade restrictions. Moreover, Dubai’s construction pipeline remains vigorous, with more than 3,500 real estate and infrastructure projects underway.

A diversified economy

Dubai’s ongoing expansion in logistics and infrastructure, backed by a substantial government budget allocation (around AED 2.6 billion for transportation and logistics this year) supports sustained activity in the construction sector. 

The city’s construction boom is not solely reliant on imported steel and aluminium from the US, as it sources materials from a diversified group of partners across Asia, Europe, and the broader MENA region. This geographical diversification further insulates Dubai from direct supply shocks related to US trade policies.

Another crucial factor is Dubai’s emergence as a global trade and transshipment hub. Free zones like Jebel Ali provide platforms for rerouting goods to avoid tariffs, enabling companies to adapt to shifting trade dynamics. This resilience reinforces Dubai’s attractiveness to investors and manufacturers seeking stability amidst geopolitical unpredictability.

Real estate continues to thrive. Despite macroeconomic pressures, April 2025 alone recorded AED 46 billion in real estate transactions, reflecting a 23% month-on-month surge. 

Betterhomes reports that interest from US and Chinese investors rose sharply following the implementation of tariffs, with website traffic from these regions jumping by 60%. This renewed interest highlights how instability in one part of the world can enhance Dubai’s appeal as a stable, strategically located destination for capital investment.

While non-oil GDP in the UAE may slow down due to global trade turbulence, government policies aimed at diversification and innovation are already mitigating such risks. The Dubai Real Estate Strategy 2033 and the aim to double foreign direct investment to US$65bn by 2031 across sectors such as logistics, finance, and renewable energy show the country’s economic resilience.

In an era of increasing water scarcity and climate uncertainty, the UAE has emerged as a critical partner for island nations struggling with water security challenges. 

A recent panel during the World Utilities Congress in Abu Dhabi highlighted the UAE's role in supporting Cyprus and Sri Lanka through technological assistance.

Cyprus, facing its most severe drought in three decades, received immediate and tangible support from the UAE. 

Maria Panayiotou, Minister of Agriculture, Rural Development, and Environment, emphasised this, stating, "Two days ago, Cyprus received desalination units of 15,000 cubic meters production of water per day. We have asked for help from the UAE, and the UAE responded positively. [It] responded immediately."

This gesture is more than a simple aid package; it represents a sophisticated approach to transboundary water cooperation. 

Panayiotou described it as "a tremendous help for Cyprus" that faces prolonged drought and severe water scarcity. 

The desalination units are part of Cyprus's broader strategy to achieve 100% water coverage by the end of the year, with a focus on using renewable energy and solar systems to reduce production costs.

Global South countries collaborate with each other

Similarly, Sri Lanka's water management challenges have drawn international attention. 

While the country boasts over 100 rivers and significant rainfall, political and infrastructural issues have complicated water distribution. 

The UAE's collaborative approach extends beyond immediate relief, supporting comprehensive water management strategies.

Both Cyprus and Sri Lanka view the UAE's support through a lens of regional cooperation and geopolitical partnership. 

As Panayiotou put it, "We act locally, but you have to think globally and cooperate regionally. This is important. We cannot do it by ourselves."

The support goes beyond mere technological transfer. It represents a model of diplomatic engagement where resource-rich nations assist countries facing environmental challenges. 

Anil Jayantha from Sri Lanka emphasised the importance of collaborative approaches, noting that solutions require working "together with all other ministries and international agencies."

As climate change continues to challenge traditional water management approaches, the UAE's support for Cyprus and Sri Lanka offers a blueprint for international cooperation.

It underscores the potential of strategic partnerships in addressing one of the most critical challenges of the 21^st century: ensuring water security for vulnerable nations.