The Middle East’s cooling problem

As temperatures rise in the Middle East and North Africa, keeping homes, workplaces, and businesses cool is becoming a growing demand on the region’s electricity systems. Cooling already accounts for nearly half of peak electricity demand and one-quarter of annual electricity use, the International Energy Agency (IEA) estimates. By 2035, it is expected to become the largest source of electricity-demand growth.

Two trends are driving that demand at once. Temperatures in the region have risen by an estimated 0.46°C per decade since 1980, while the number of air-conditioning units in use has increased by around 50% since 2010, according to the IEA’s 2025 The Future of Electricity in the Middle East and North Africa. Higher incomes are also putting AC within reach of more households.

This creates an unusual development challenge. Expanding access to cooling can protect productivity, health, and living standards, but requires electricity systems to accommodate enormous loads during the hottest hours of the year. In a region divided between wealthy states with widespread AC ownership and countries where reliable electricity itself remains uncertain, keeping cool is becoming another measure of economic capacity.

The peak gets higher

Electricity demand across MENA has tripled since 2000, making the region the third-largest contributor to global demand growth after China and India. The IEA projects another 50% increase by 2035, equivalent to adding the current electricity consumption of Germany and Spain combined.

Cooling places unusual pressure on electricity systems because much of its use occurs at the same time. The IEA projects regional peak electricity demand to rise about 125 gigawatts, or 50%, from 2023 to 2035, with cooling accounting for more than half of that increase. Cooling’s share of peak demand is more than twice its share of annual electricity consumption because millions of units are switched on simultaneously during the hottest periods.

Demand has several sources. More than 4 billion square metres of new building space is expected across MENA by 2035, increasing residential and commercial floorspace by about 30%. Since 2010, an average 1.1 million households a year have gained access to cooling.

Heat has an economic cost

Cooling demand is also rising as extreme heat takes a greater toll on workers and businesses. 

The World Bank’s June 2026 Competing in the Face of Climate Risks analyzed firm-level data from seven countries in the Middle East and North Africa between 2019 and 2024. Nearly 32% of firms were exposed to more than 100 days a year when average temperatures exceeded 35°C. More frequent extreme heat was associated with a 6% decline in sales, a 4% reduction in labor productivity and an 8% decline in wages, with smaller businesses and firms outside global value chains hit harder. 

In Lebanon, separate World Bank modelling cited in the report projects that heat-related losses in labor productivity, together with flooding and lower agricultural yields, could reduce real GDP growth by 1.1% to 2% annually by 2040.

Yet firms do not necessarily have the capital to adapt. In Egypt, only 9% of firms surveyed had invested in cooling technologies, with financing constraints and high upfront costs limiting adaptation. 

Cooling is therefore becoming both an input into productivity and a potential source of inequality, separating households and businesses that can reliably power it from those that cannot.

Paying for the hottest hour

Accommodating the region’s growing cooling load will require substantial investment in generation and electricity networks. MENA power-sector investment reached $44 billion in 2024 and is projected to increase by 50% by 2035, with grids accounting for close to 40% of total power-sector spending over the coming decade.

But how much new capacity countries need depends partly on the efficiency of the air conditioners creating that demand. The average unit sold in MENA has less than half the efficiency of the average unit in Japan, according to the IEA. Raising AC efficiency could reduce the increase in regional peak demand by 35 GW by 2035, roughly equivalent to Iraq’s current total generation capacity.

The United Nations Environment Programme’s 2025 Global Cooling Watch suggests the savings could be substantial at a global level. Under its sustainable cooling pathway, annual electricity savings could reach 8,500 TWh by 2050, worth $1.3 trillion, while lower peak loads could avoid an estimated $13 trillion to $26 trillion in investment in generation and grid infrastructure.

Who gets to stay cool?

The regional averages conceal a sharp divide. AC ownership is already high across the Gulf Cooperation Council states but remains relatively low elsewhere in MENA, leaving countries with less access today facing potentially faster demand growth as incomes rise.

Simply installing more air conditioners cannot solve the problem on its own. UNEP argues that passive measures such as shading, improved building envelopes and cool surfaces can lower temperatures while reducing electricity demand. Its modelling finds that combinations of passive interventions can cut indoor temperatures by 6°C to 9°C in some settings, while hybrid systems using fans alongside AC can reduce energy consumption by more than 30% compared with conventional air conditioning. 

For countries with fragile electricity systems, the stakes are particularly high. The IEA points to distributed solar as one way to improve resilience in Lebanon, Syria, and Yemen, where weakened grids make centralized supply less dependable. In Lebanon, years of electricity shortages have pushed households and businesses toward rooftop solar, putting some of the infrastructure needed to power cooling outside the national grid. Solar also has a useful coincidence with cooling because its output is strongest around the hours when AC demand is high.

The Middle East’s cooling problem is therefore not simply how to power more air conditioners. It is how to make protection from extreme heat widely available without forcing electricity systems to chase ever-higher summer peaks. As cooling becomes essential to work, commerce and daily life, access to it will depend as much on the quality of buildings and power systems as on the machine hanging on the wall.