Sustainability

UAE climate fund aims to mobilise $250bn by 2030

February 19, 2024, 5:21 PM

Cop28 president Sultan Al Jaber and Cop28 director general Majid Al Suwaidi at the Closing Plenary session — Cop28 president Sultan Al Jaber and Cop28 director general Majid Al Suwaidi

Altérra set up at Cop28
Two-part strategy
$4.4trn climate funding gap

Altérra, a $30 billion climate-focused fund set up by the UAE and asset managers BlackRock, TPG and Brookfield, aims to catalyse the investment of $250 billion of private capital by 2030, its chief executive said.

“The vision for Altérra was borne out of the Cop28 agenda for how to make climate finance more available, accessible and affordable and remove barriers impeding investment, especially into the Global South,” said Majid Al Suwaidi, Altérra’s chief executive and director general of Cop28.

Altérra, which is headquartered at Abu Dhabi Global Market free zone, was announced during the UN climate summit last year.

The aim is to make it the private sector “fund of choice” for the climate transition, Al Suwaidi told the World Government Summit in Dubai last week.

Nations face an annual $4.4 trillion investment gap by 2030 in meeting energy transition goals set by the UN, according to a report last year.

The UAE government has already committed $30 billion to Altérra, and a two-part strategy is now being fleshed out for the fund to mobilise a further $250 billion from the private sector by the end of the decade.

Its first investment vehicle, Altérra Acceleration, has $25 billion of the UAE’s initial funds to invest.

It is designed to “steer capital towards investments at scale, to accelerate the transition to a net zero and climate-resilient economy,” state news agency Wam reported.

The second arm, the $5 billion Altérra Transformation, is designed to provide risk mitigation capital to incentivise investment flows into the Global South.

The two-part structure is designed to bridge the investment gap needed to keep global warming to a maximum 1.5C increase and create new investment opportunities for developing economies, Wam added.