Doha, Qatar – April 2025
Climate extremes have become the new normal. In 2024, the world was struck by 151 major weather disasters—more than any other year on record. From deadly floods and wildfires to unprecedented heatwaves, over 800,000 people were displaced globally. The scale and intensity of these events are no longer anomalies, they are accelerating.[1]

Between 1981 and 2020 in the MENA region, the annual air temperature rose by an average of 0.36°C per decade. Summers are warming even faster, with temperatures climbing by 0.45°C per decade. The region has already experienced record-breaking heatwaves, such as July 2023 when temperatures soared to 51°C in Algeria, 49°C in Tunisia, and 46°C in Jordan. These extreme temperatures are dangerous, leading to widespread power outages, health crises, and even fatalities.[2]

The Al-Attiyah Foundation, in its latest Sustainability Research Paper, titled ‘Weathering the Storm: The Impact, Risks and Opportunities of Extreme Weather Events’, examines the far-reaching impacts of extreme weather, highlighting the financial, operational, and infrastructural risks they pose.

The energy sector faces mounting technical and financial risks as extreme weather events disrupt both fossil fuel and renewable energy production. Droughts have reduced hydropower capacity, increasing dependence on fossil fuels during heatwaves, while wind turbine icing in colder climates raises maintenance costs and operational downtime. Flooding further compounds challenges, delaying wind energy projects by disrupting construction, limiting site accessibility, and weakening soil stability for turbine foundations. It also damages underground cables, substations, and grid connections, postponing electrical integration and project commissioning, extending timelines, increasing costs, and prolonging return on investment (ROI) periods.

With critical energy assets increasingly at risk, governments and companies must prepare for and manage climate risk. One promising solution gaining traction is parametric insurance, a financial tool that offers fast, pre-agreed payouts based on specific weather triggers—such as temperature, wind speed, or rainfall levels—rather than traditional loss assessments.

Parametric models provide a transparent, efficient, and scalable way to manage the financial impact of climate events. For energy operators, they offer vital liquidity to repair damage or cover revenue losses, reducing downtime and enabling faster recovery. As weather events become more volatile and unpredictable, such innovative instruments can complement traditional insurance and bolster the resilience of energy systems.

In addition, the paper examines the importance of broader risk management strategies. These include enhancing grid flexibility with Artificial Intelligence (AI) and predictive analytics, climate-proofing infrastructure, and diversifying supply chains to avoid overreliance on vulnerable regions.

Although the challenges of climate volatility are immense, by redefining resilience, leveraging innovative financial instruments, and transforming vulnerabilities into strategic advantages, businesses and governments can build a future that is not only more adaptive but also more secure and sustainable in the face of extreme weather events.

The full Sustainability Research Paper is available on the Al-Attiyah Foundation website. For more information, please visit https://www.abhafoundation.org/.