The United Arab Emirates (UAE), host of the COP28 climate summit, has set up a USD30bn climate fund for supporting global climate solutions, as reported by Reuters on November 30. Dubbed Alterra, the fund will allocate USD25bn to steer institutional capital toward climate investments at scale and USD5bn to incentivize investment flows into the Global South. Finance giants including BlackRock [BLK:US], Brookfield [BAM/A:CN], and TPG [TPG:US] have joined the Alterra as inaugural launch partners. The fund aims to mobilize USD250bn of investment by the end of the decade, with a focus on transformation investments in emerging markets and developing economies.

Since being selected as the COP28 host a year ago, the UAE has faced doubts whether it should oversee global climate negotiations, given its role as one of the world’s largest oil and gas producers. The substantial investment is positioned to bolster the UAE’s credentials as the host of COP28 and demonstrate its commitment to use some of its vast oil wealth to facilitate the transition to clean energy. So far this year, UAE state companies and funds have been linked to approximately USD200bn in investments worldwide, mostly in green energy. Around a third of the capital is allocated for developing economies, including joint ventures for clean energy in Egypt, Indonesia, and Zambia, a memorandum of understanding for wind, solar, and battery projects totaled USD8bn in Malaysia, and agreements for an estimated USD30bn in energy deals in Turkey.

Sources:

https://www.reuters.com/world/middle-east/uae-set-announce-30-billion-climate-finance-fund-cop28-sources-2023-11-30/

https://www.ft.com/content/36a2f00d-eb7a-4057-bc31-6be6c4f01d16

https://www.scmp.com/news/world/middle-east/article/3243558/cop28-uae-sets-us30-billion-fund-bridge-global-climate-finance-gap

https://www.ft.com/content/36a2f00d-eb7a-4057-bc31-6be6c4f01d16