The Role of Artificial Intelligence in Enhancing Green Finance to Support the Renewable Energy Sector in Saudi Arabia‏

Abstract

This study addresses the role of artificial intelligence in enhancing green finance as a strategy to support the renewable energy sector in Saudi Arabia from 2019 to 2024. Within the framework of Vision 2030, which focuses on environmental sustainability and diversifying energy sources, the study explores how AI technologies contribute to improving the efficiency of green finance and accelerating investments in renewable energy. The study employs an analytical approach based on the least squares methodology to analyze the relationship between relevant variables. The dependent variable is the growth rate of renewable energy, while the independent variables include the growth rate of per capita GDP, the AI readiness index, and average oil prices. The data analysis relies on official sources, such as the International Monetary Fund and the World Bank, as well as Saudi national statistics. The results indicate that artificial intelligence shows a positive relationship with renewable energy development, although its statistical significance remains limited in the short term. The model also demonstrates strong explanatory power, with an R-squared value of 78%. At the same time, oil prices show a modest positive impact, while the growth of per capita GDP exhibits a negative effect, indicating that income increases are still inconsistent with sustainable consumption behaviors in the Kingdom. The study concludes that although artificial intelligence has not yet become a dominant force, it holds significant potential as a tool to enhance green finance strategies. Based on these findings, the study recommends developing a national AI infrastructure dedicated to green finance, integrating AI into regulatory and policy frameworks, expanding green financial instruments, and promoting regional and international collaboration. Future research should also explore the long-term effects of integrating AI into sustainable finance across multiple timeframes and diverse indicators to support effective policymaking in the Kingdom's transition to a green economy.