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The United Arab Emirates (UAE) has announced a US$30 billion fund to galvanise international efforts to create a fairer climate finance system and improve funding in the Global South.
The fund will be run by the newly launched vehicle, ALTÉRRA, with COP 28 director-general Majid Al Suwaidi serving as CEO, while COP28 president Dr Sultan Al Jaber will chair the company’s board.
ALTÉRRA automatically becomes the world’s largest private investment vehicle for climate change action and aims to mobilise US$250 billion globally by 2030, according to its statement.
READ: WATCH: COP28 opens with activation of $278m loss and damage fund
ALTÉRRA said that finance for climate action was not currently available, accessible or affordable enough where it was needed:
“By 2030, emerging markets and developing economies will require US$2.4 trillion every year to address climate change. That is why COP28 made fixing climate finance a key pillar of its action agenda and has worked to deliver ambitious solutions, including mobilising private markets at scale.”
This announcement comes a day after Al Jaber pledged $278 million towards the loss and damage fund, which aims to assist developing countries in dealing with climate change impacts. Of this amount, the UAE committed $100 million.
Al Jaber described ALTÉRRA’s launch as a “defining moment” in the creation of a new era of international climate finance.
“ALTÉRRA provides a transformational solution for attracting private capital. Its scale and structure will create a multiplier effect in climate-focused investment, making it a vehicle like no other. Its launch reflects the COP Presidency’s Action Agenda and the UAE’s efforts to make climate finance available, accessible and affordable,” Al Jaber said.
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ALTÉRRA will assemble a team of specialist climate investment professionals with a strong track record of investing in emerging and developing markets. ALTÉRRA has been established by Lunate, an independent global investment manager, and is domiciled in the Abu Dhabi Global Market.
Al Suwaidi said that ALTÉRRA was a critical element in the UAE’s efforts to create a global green finance ecosystem that stimulated and empowered the growth of a new climate economy.
“It will build a vibrant climate investment landscape, which further catalyses investment into the Global South,” he added.
The company will have a dedicated investment focus on supporting four key priorities that underpin COP28’s action agenda, namely: energy transition, industrial decarbonisation, sustainable living and climate technologies.
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Already, ALTÉRRA has allocated immediate capital investment for the development of over 6.0 GW of new clean energy capacity in India. This will include the construction of 1 200 MW of wind and solar projects that will begin producing clean power by 2025.
