Post-conflict infrastructure investments in the GCC

When Middle East hostilities eventually conclude, the GCC regional infrastructure agenda will crystallize around three simultaneous imperatives: repairing what has been damaged, expanding what exists and hardening everything against climate change, physical attack and cyber intrusion.

This presents an opportunity beyond who will finance it, from where and ensuring Shariah compliance, as most ambitiously, can the GCC use this moment to become the world’s pre-eminent platform for infrastructure finance itself?

Infrastructure raises incomes not merely by existing, but by reducing the cost of moving goods, capital and information. For fund managers, the implication is clear: the asset class that most directly exploits these dynamics in a post-conflict GCC is both large and almost entirely under-addressed by private capital today.

The World Bank has documented that early repair investment delivers the highest near-term multipliers in post-conflict environments. Incremental repair demand across the GCC is estimated at US$15-25 billion per year above baseline maintenance spend in the first five recovery years.

The GCC’s current funding mix is approximately 75% government-sourced and 25% private, against an international benchmark of 40-50% private in comparable economies.

Private infrastructure funds are the most under-deployed layer relative to opportunity. Current private fund deployment into GCC infrastructure runs to US$5-10 billion per year against a potential market of US$40-60 billion in privately financeable assets.

The gap is not explained by lack of investable assets. It is explained by the absence of credible mid-market general partners with regional track records, inadequate guarantee and first-loss structures to de-risk entry as well as a limited partner (LP) due diligence cycle that consistently lags the deal cycle by 12 to 24 months.

Also, the green and sustainable bond layer is structurally embryonic relative to the climate hardening requirement. MENA sustainable issuance ran at US$20-25 billion in 2026 according to S&P Global, against a MENA climate finance need of US$495 billion over 15 years.

The absence of a GCC-specific green infrastructure taxonomy means that issuers and investors cannot efficiently price climate-aligned infrastructure risk.

Further, tokenized infrastructure assets represent a structural funding gap of a different kind: not a shortage of capital but a shortage of market infrastructure to access retail and semi-institutional capital. The Abu Dhabi Global Market digital asset framework and the Dubai International Financial Centre licensing of USDC and EURC in early 2025 provide the regulatory foundation. The market itself does not yet exist at a meaningful scale.

This gap analysis shows it is not merely a financing problem. It is a market architecture problem. The GCC has the sovereign capital, the deal flow, the geographic position and the regulatory platforms to become the world’s pre-eminent infrastructure finance hub.

What it lacks is the institutional infrastructure to organize that capital efficiently, price it correctly and distribute it to the projects that need it most.

A GCC taxonomy, anchored in Islamic finance principles and extended to cover climate hardening, cyber resilience and post-conflict repair, would create a pricing signal for infrastructure Sukuk that currently does not exist.

The institutional investor mandate also needs reform. GCC pension funds and insurance companies now concentrate domestic assets in government securities and listed equities rather than infrastructure.

A coordinated reform requiring domestic institutional investors to allocate a minimum percentage of AuM to GCC infrastructure vehicles, with eligible vehicles defined by the International Finance Corporation licensure and taxonomy compliance, would create a permanent domestic institutional LP base that does not currently exist.

The parallel with Singapore’s Central Provident Fund mandatory allocation to approved investment products, and Australia’s superannuation infrastructure mandates, is direct and instructive.

London became the global infrastructure finance hub by building the market architecture before the deal flow required it. The GCC has the deal flow. What it lacks is the architecture. That is a solvable problem.

Dr Bhaskar Dasgupta is the Middle East Stablecoin Association chairman and former head of market infrastructure, digital and VC/fintech, head of South Asia at Abu Dhabi Global Market.