Cop28 to invest billions in African clean energy

• Initiative ‘with Africa, for Africa’
• 600m people without access to electricity
• Masdar and AMEA target 15GW by 2030

A UAE finance initiative led by Cop28 will put $4 billion direct investment and has pledged billions more into clean energy projects in Africa, the climate change summit’s president-designate Sultan Al Jaber said this week.  

Al Jaber told the inaugural African Climate Summit in Nairobi on Monday that the initiative – involving high-profile UAE-based investors – is part of Cop28’s strategy to help triple global renewable energy provision by 2030 and increase financing available to tackle climate change. 

The investors include Abu Dhabi Fund for Development (ADFD), Etihad Credit Insurance (ECI), and UAE renewables companies Masdar and AMEA Power.

Africa50, an investment platform established by African governments and the Africa Development Bank to help solve infrastructure challenges across the continent, is also part of the deal. 

ADFD and ECI are kickstarting the initiative, with the Abu Dhabi development fund providing $1 billion to address clean energy projects’ basic infrastructure needs and mobilise additional private investments.

ECI will provide $500 million of credit insurance to de-risk and unlock private capital. 

Masdar, which is already active in 22 African countries, is committing $2 billion of equity under the deal. It aims to mobilise an additional $8 billion in project finance through its Infinity Power energy distribution joint venture with Egypt’s Infinity.

Masdar will target the delivery of 10 gigawatts (GW) of clean energy capacity in Africa by 2030. 

Finally, AMEA Power has pledged $5 billion for the initiative – $1 billion of equity and $4 billion of project finance. It is targeting 5GW of renewable energy capacity in Africa by 2030. 

The enterprise seeks to “create pathways for other multilateral development banks, governments, and philanthropies to catalyse additional private sector investment”, Al Jaber said. 

AGBI reported that Middle East sovereign investors are likely to increase investments across Africa in the years ahead, building on a 50 percent jump from the region in the past five years. 

The initiative will sit under the umbrella of Etihad 7, a development platform launched by the UAE at Abu Dhabi Sustainability Week last year and backed by the Ministry of Foreign Affairs. It aims to provide 100 million people across Africa with clean electricity by 2035. 

Al Jaber told the Nairobi summit: “This initiative builds on the UAE’s track record of commercially driven, innovative, blended finance solutions that can be deployed to promote the adoption of clean energy in emerging and developing nations.”

The funding arrangement will prioritise investments that have clear energy transition strategies, strong regulatory frameworks and a “master plan” for developing energy grid infrastructure that integrates supply and demand, he added. 

“In short, this initiative is designed to work with Africa, for Africa.

“It aims to clearly demonstrate the commercial case for clean investment across this continent.

“And it will act as a scalable model that can be replicated to help put Africa on a superhighway to low carbon growth,” Al Jaber said.

Fast-tracking the energy transition, fixing climate finance, focusing on people, lives and livelihoods and underscoring these efforts with inclusivity are the four key pillars of the Cop28 presidency’s action plan, when the UAE hosts the United Nations (UN) climate change summit later this year. 

This week Al Jaber called on Africa’s leaders to set out clear long-term energy transition and investment plans, as well as the policy and regulatory frameworks to help unlock commercial finance. 

“Africa accounts for just 3 percent of global emissions, yet suffers some of the worst consequences,” he said, pointing to droughts, floods and failed harvests that have “exposed one-fifth of Africa’s people to hunger, tripled the number of people displaced in the last three years, and drag down Africa’s GDP growth by at least 5 percent every year”.

An estimated 600 million people in sub-Saharan Africa live without access to electricity, according to Cop28. 

Giving greater access to clean energy will help, but investment in African renewables currently represents just 2 percent of the global total and less than a quarter of the $60 billion a year the continent needs by 2030, it added, citing UN figures. 

The UN Framework Convention on Climate Change is due to release the technical data around the first global stocktake of climate progress made by participating nations since the 2015 Paris Agreement.

It is widely anticipated that the stocktake will find the world off track from meeting its objectives, Cop28 said.