Abu Dhabi and World Bank unit to invest $1.5bn in emerging markets

ADFD

• Agreement to focus on SMEs working on climate and food security
• Abu Dhabi Fund for Development signs deal with World Bank’s IFC

Abu Dhabi and a World Bank subsidiary have agreed to invest up to $1.5 billion in sustainable private sector-led projects in emerging markets.

Under the memorandum of co-operation, which was signed at the World Government Summit in Dubai on Tuesday, the Abu Dhabi Fund for Development and the World Bank’s IFC (International Finance Corporation) will provide funding for industries including clean energy, clean technologies, food security and climate mitigation and adaption. 

The pair will focus on supporting small and medium-sized businesses (SMEs) to help strengthen the private sector in developing countries. 

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“The co-operation framework will boost investment in climate and food security projects in crucial sectors,” said Mohamed Saif Al Suwaidi, director general of the Abu Dhabi fund, in a statement. 

“It will also help stimulate economic activity in both the national private sector and in developing countries, enabling countries to achieve their development goals and programmes.”

The UAE, which has pledged to achieve net zero by 2050, has spent more than $40 billion on clean energy projects, according to government data. 

The UAE has also invested $16.8 billion in renewable energy infrastructure abroad, mostly in developing nations. It will host Cop28, the UN’s annual climate change conference, later this year. 

By 2050, the UAE aims to derive 44 percent of its energy from renewable sources, 38 percent from gas, 12 percent from “clean coal” – which deploys carbon capture and storage technology to prevent emissions entering the atmosphere – and 6 percent from nuclear.

If the UAE achieves its target, the country will cut carbon emissions from electricity generation by 70 percent, the federal government estimates. 

The Abu Dhabi Fund for Development provides sovereign loans at below-market interest rates to help developing countries achieve sustainable economic growth and reduce poverty, according to its website. 

The organisation, founded in 1971, has provided AED167 billion ($45.5 billion) across 510 projects spanning agriculture, utilities, housing, transportation, industry and social and health services.