Gulf Cooperation Council companies raised $9.7 billion in debt during January 2026, nearly five times the volume recorded in the same month a year earlier. The figure, drawn from an S&P analysis, reflects a fundamental change in how the Gulf is financing its economic transformation: governments are increasingly channelling capital through corporate balance sheets rather than deploying it directly from sovereign funds.
The shift is not incidental. As hydrocarbon revenues become less predictable, GCC governments are recalibrating fiscal strategy, pushing state-linked entities and private companies to access external funding while retaining public capital for strategic reserves and direct project anchoring.
Infrastructure investment at an unprecedented scale
Abu Dhabi alone intends to procure approximately $54 billion of infrastructure through public-private partnerships. Dubai is advancing major projects to market, including its $22 billion Strategic Sewer Tunnels Project. These are not programmes that sovereign balance sheets can absorb independently; they require sustained corporate borrowing at scale.
Saudi Arabia has emerged as one of the most active public-private partnership markets across Europe, the Middle East and Africa. International investors are entering with greater confidence as regulatory frameworks mature and project pipelines grow more visible. Approximately 29% of rated companies’ capital expenditure in 2026 and 2027 is tied to investments in Saudi Arabia, with Vision 2030-related infrastructure accounting for the majority.
Digital infrastructure enters the financing mix
Data centres have become a recognised asset class in GCC debt markets. In January 2025, funds affiliated with KKR agreed to acquire a stake in Gulf Data Hub, a UAE-based operator, with both parties committing to support more than $5 billion in data centre expansion across the region. Telecom operators are also seeing rising capital expenditure requirements as artificial intelligence adoption accelerates across financial services, logistics and retail sectors.
A PwC report found that companies in these sectors are expected to move from pilot programmes to full operational deployment of AI-enabled services during 2026, all of which requires sustained capital investment. Debt markets are increasingly the mechanism through which that capital is accessed.
A market that has grown by moving beyond banks
The GCC’s outstanding debt capital market reached $1.1 trillion at the end of the third quarter of 2025, a 12.7% increase year on year according to Fitch Ratings. Sukuk accounted for 40% of the total, while ESG-linked sukuk reached $29.7 billion, up 54.1% year on year. The composition of that growth is as significant as the headline figure.
Debt financing in the region has historically been provided by local banks, primarily for large corporate and project finance transactions. A funding gap estimated at $250 billion for mid-sized companies has opened as local economies diversify and produce more complex financing needs than bank lending alone can serve efficiently. Private debt funds, both local and international, are now filling that gap through instruments ranging from senior secured debt to Sharia-compliant structured equity.
Risk concentration among newer borrowers
The expansion of market access is not without risk. Around 58% of rated GCC issuers are government-related entities with strong sovereign links that anchor overall market stability. However, growth in new issuance is increasingly coming from companies outside this group: mid-sized firms and first-time issuers whose debt service capacity is directly tied to the same infrastructure and diversification projects driving capital demand.
S&P identified capex-intensive companies as particularly sensitive to interest rate movements, while Fitch flagged oil price volatility and uneven market depth as ongoing credit risks. For newer borrowers, a tightening in financing conditions would have immediate consequences, including potential delays to projects already in progress.
Rated companies face average refinancing needs of $20 billion annually over the next four years. With non-oil sectors now accounting for 75% of GDP in the UAE and 71% in Saudi Arabia, the corporate debt markets that are funding diversification have become structurally important to the region’s economic direction.