UAE commits USD30 billion world's largest private investment in climate action

United Arab Emirates has committed USD30 billion in capital to launch a landmark climate-focused investment vehicle at COP28.

With this USD30 billion commitment, the fund dubbed ALTÉRRA becomes the world’s largest private

investment vehicle for climate change action and will aim to mobilise USD250 billion globally by 2030.

This significant investment aims to drive international efforts toward creating a fairer climate finance system, with a particular focus on improving access to funding for the Global South.

"With this US$30 billion commitment, the fund becomes the world’s largest private investment vehicle for climate change action," emphasized the UAE representative at the COP28.

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The fund sets an ambitious goal to mobilise USD250 billion globally by 2030, making it a key player in steering private markets toward climate investments. The focus is on transforming emerging markets and developing economies, where traditional investment has been lacking due to perceived higher risks.

"Finance for climate action is not currently available, accessible, or affordable enough where it is needed," highlighted the COP28 spokesperson. "By 2030, emerging markets and developing economies will require USD2.4 trillion every year to address climate change."

COP28 placed fixing climate finance at the core of its Action Agenda, emphasizing the need for ambitious solutions and mobilizing private markets at scale. The launch of fund was hailed as a "defining moment" by COP28 President Dr. Sultan Al Jaber, marking a new era in international climate finance.

"The 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," Dr Al Jaber, who will chair ALTÉRRA’s Board, affirmed.

Ambassador Majid Al Suwaidi, COP28 Director-General and ALTÉRRA’s Chief Executive Officer added that ALTÉRRA would have a dedicated team of specialist climate investment professionals. These professionals bring a strong track record of investing in emerging and developing markets.

ALTÉRRA, established by Lunate, an independent global investment manager, and domiciled in the Abu Dhabi Global Market, is set to be a critical element in the UAE’s efforts to create a global green finance ecosystem.

ALTÉRRA acceleration, a USD25 billion component, is set to steer institutional capital towards climate investments at scale, serving as an anchor investor in climate strategies. ALTÉRRA transformation, a USD5 billion component, will provide risk mitigation capital to incentivize investment flows into the Global South.

In collaboration with BlackRock, Brookfield, and TPG as inaugural launch partners, ALTÉRRA has committed USD 6.5 billion to climate-dedicated funds for global investments, including the Global South. The partners are expected to mobilize capital from other institutional investors and global entities.

Immediate capital investment from ALTÉRRA and its partners has been earmarked for the development of over 6.0 Gigawatts of new clean energy capacity in India. This includes the construction of 1,200 Megawatts of wind and solar projects set to begin producing clean power by 2025.

ALTÉRRA is set to put in place a Climate Impact Framework to ensure it is driving positive climate transformation toward collective climate objectives.