The Middle East confronts a significant and widening disparity between its climate adaptation funding requirements and actual expenditures. According to the Brookings Institution, the region's national adaptation plans and nationally determined contributions estimate a need for $8.2 billion annually until 2030. However, modelled adaptation costs are projected at $17.1 billion per year, highlighting a substantial and growing financial gap.

Amar Bhattacharya, a senior fellow at the Brookings Institution, emphasized this concern during the World Government Summit in Dubai, stating that the discrepancy between current spending and necessary investment in adaptation is both large and increasing.

The United Nations Economic and Social Commission for Western Asia has also underscored the region's vulnerability to climate change, noting that Arab states require over $570 billion in climate finance by 2030 to enhance resilience. Despite these pressing needs, the region received only $34.5 billion in public international climate finance over the past decade, representing less than 6% of the estimated requirement. Of this amount, loans accounted for $30 billion, significantly surpassing the $4 billion in grants.

The allocation of these funds has been uneven, with mitigation projects receiving three times more financing than adaptation initiatives, despite the latter being a stated priority for many Arab countries. Additionally, there is a notable imbalance in fund distribution among nations; the six least developed countries in the region received only 6.6% of climate finance support.

The Middle East Institute highlights that the Middle East and North Africa region has received among the lowest financial flows for climate mitigation and adaptation projects globally. Between 2019 and 2020, the region secured just $16 billion, in stark contrast to the $293 billion allocated to East Asia and the Pacific Islands during the same period.

Domestically, some MENA governments are taking proactive steps to mobilize climate finance. Egypt, for instance, launched the region's first green sovereign bond, valued at $750 million, to fund environmentally friendly projects. Similarly, the Saudi Electric Company established a framework for "green sukuk" and issued two tranches of $650 million each. Despite these initiatives, the MENA region accounted for just 1% of the total $228 billion in green bonds issued globally in 2020, indicating significant untapped potential.