Bahrain investment agency courts capital as reserves fall
Bahrain’s EDB is seeking new investment from the U.K., China and Hong Kong while the kingdom faces debt, reserve and security pressures.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Bahrain’s Economic Development Board is stepping up efforts to attract foreign investment as the kingdom faces fiscal pressure and regional security risks. In an interview with Fortune, EDB chief executive H.E. Noor bint Ali Alkhulaif said the agency is working to keep investment plans on track despite strains on reserves and disruption in some sectors.
Noor was in the U.K. last week for a five-day visit aimed at strengthening economic ties and drawing new capital, according to Bahrain’s EDB. The trip followed a five-day mission to China and Hong Kong at the end of June, where the agency said it sought to build on existing investment relationships.
China is Bahrain’s third-largest trading partner, with bilateral trade reaching $2.43 billion in 2025, according to Fortune. The outreach comes as Bahrain, the smallest Gulf state, works with a nominal GDP of $48.85 billion, according to the IMF, and what S&P Global Ratings describes as the Gulf’s heaviest debt burden.
Trade deal gives Bahrain a target
The EDB is also looking to benefit from the U.K.-GCC free trade agreement, which Fortune said was concluded in May. The U.K. government says British trade with Gulf Cooperation Council countries is currently worth £53 billion, or about $71 billion, and could rise by 19.8% a year as a result of the deal.
Noor told Fortune that Bahrain is focused on manufacturing, energy, life sciences and healthcare as areas where the agreement could help bring investment. She said the EDB is preparing ahead of the deal’s formal signing so Bahrain can move once the framework is in place.
Bahrain is also trying to position itself around artificial intelligence and cloud computing. Fortune reported that Amazon Web Services and Oracle are seeking to expand in the kingdom, while talks continue over Bahrain’s role as a regional data-hosting center.
Noor said earlier drone attacks that affected AWS data centers in the UAE and Bahrain have changed the debate around cloud infrastructure. She told Fortune the issue now extends beyond digital sovereignty to the ability of systems to withstand disruption.
Reserves and ratings add pressure
Fortune reported that Noor said the EDB has not seen major disruption to existing or planned investments in Bahrain. She also acknowledged that manufacturing, logistics and tourism have been affected by the war.
Bahrain’s foreign exchange reserves fell 56% to $1.5 billion at the end of May, their lowest level since the Covid crisis, according to Fortune. Noor confirmed the decline and said Bahrain has not used the $5.4 billion currency swap line provided by the UAE in April.
She described the UAE facility as a support measure intended to reassure the market, banks and investors rather than meet an urgent funding need, according to Fortune.
Bahrain remains the only GCC country not rated investment grade by the three major credit rating agencies, according to S&P Global Ratings, which points to high public debt and large fiscal deficits. That rating position makes investor confidence a central concern for the kingdom’s development plans.
Regional risks have also increased. CNBC reported renewed Iranian attacks on several GCC states, including Bahrain, over the past week, adding to the difficulties facing Gulf economies as they try to sustain investment and growth.
This story draws on original reporting from Fortune.