Gulf countries accelerating investments in next-gen sectors with Korean tech

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Gulf countries accelerating investments in next-gen sectors with Korean tech

Published: 04 Aug. 2025, 15:33 Updated: 06 Aug. 2025, 19:31

Audio report: written by reporters, read by AI

Unit 3 of the Barakah nuclear power plant in the United Arab Emirates [KOREA ELECTRIC POWER CORP]

Even as global trade faces mounting uncertainty from U.S. tariffs and supply chain realignments, the Gulf Cooperation Council (GCC) is forging ahead with large-scale development projects — and Korean firms are moving quickly to capitalize.

The GCC is an international organization of six countries on the Arabian Peninsula: Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Oman and Bahrain. Fueled by oil-backed sovereign wealth funds, GCC member states are accelerating investments in next-generation sectors including artificial intelligence, renewable energy and high-tech infrastructure. The shift marks a new phase of economic transformation in the Gulf, and Korea is increasingly playing a role in powering it.

Korea's exports to GCC countries reached $1.23 billion in June, up 8.7 percent from a year earlier, according to trade statistics released on Saturday by the Korea International Trade Association. That growth rate is more than double the 4.3 percent increase in Korea’s overall exports during the same period.

Projects ordered by the GCC account for more than half of all project orders in the Middle East, making the bloc a leading driver of the region’s economy.

By export item, significant growth was seen in goods related to power and infrastructure, including compressors, up 146.6 percent; transformers, up 137.8 percent; high-voltage electrical equipment, up 52.4 percent; nuclear reactors, up 7.6 percent; and electric cables, up 5.9 percent. The rise reflects increased participation by Korean companies as development projects expand across the GCC.

A report by the Korea Trade-Investment Promotion Agency said recent project trends in the GCC have shifted from a focus on residential construction and oil and gas to more diverse areas such as leisure, mixed-use and service-oriented developments, as well as power, transportation and desalination infrastructure. Major initiatives include the UAE’s Digital Government Strategy 2025, Saudi Arabia’s Vision 2030 and Oman’s Vision 2040.

A Hanwha Power Systems air compressor [HANWHA POWER SYSTEMS]

Leading Korean companies tapping into these opportunities include Hanwha and Doosan. Hanwha Power Systems has exported an average of 30 compressors annually to GCC countries over the past three years. Compressors, widely used in oil and gas operations and power plants, are in steady demand in the UAE, Saudi Arabia and Qatar.

“Korean-made compressors are regarded as the best tailor-made products in the Middle East and continue to see strong annual export performance,” said a Hanwha Power Systems spokesperson. “We recently opened a new service center in Dammam, Saudi Arabia, following our existing center in Abu Dhabi.”

Doosan Enerbility signed a 340 billion won ($245.6 million) contract in April to supply steam turbines and generators to Saudi Arabia, followed by a 130 billion won fuel conversion contract in May. Over the past five years, the company has won projects worth more than 6 trillion won.

“Our strong project performance in the Middle East builds on over 40 years of accumulated trust and technological expertise,” said Sohn Seung-woo, head of the Power Service Business Group at Doosan Enerbility.

A low-pressure rotor of a Doosan Enerbility steam turbine [DOOSAN ENERBILITY]

Korea’s nuclear energy sector is also expanding steadily in the Middle East following the landmark Barakah nuclear power plant deal in the UAE in 2009. Korea Electric Power Corp. (Kepco) said its Middle East branch is currently managing 11 projects in Saudi Arabia, the UAE and Bahrain. The Middle East accounted for 98 percent of Kepco’s overseas project wins by capacity in the past five years. In June, Kepco and Doosan Enerbility jointly secured project financing for a gas-fired combined cycle power project worth 5.5 trillion won.

The Middle East remains a region with chronic geopolitical risks. The conflict in Gaza continues, and tensions between Israel and Iran persist. Companies operating in the region face constant concerns about regional security and logistics, as well as bureaucratic hurdles and an economy sensitive to oil prices.

However, some analysts believe that escalating conflict in the wider Middle East could accelerate the movement of capital into the relatively stable GCC states.

“A shift in the geopolitical paradigm may concentrate more capital in economic hubs like the United Arab Emirates, Qatar and Saudi Arabia,” a Kotra official said. “The GCC is likely to strengthen its role as a logistics hub connecting the Middle East, Africa and South Asia.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY NA SANG-HYEON [[email protected]]