UAE President Sheikh Mohamed unveils $30bn climate fund

Image courtesy: Wiktor Szymanowicz/ Getty Images

The UAE’s President Sheikh Mohamed bin Zayed Al Nahyan has announced the establishment of a $30bn climate fund for global climate solutions, according to the state news agency, Emirates News Agency.

The fund is designed to bridge the climate finance gap and aims to stimulate $250bn of investment by 2030, Sheikh Mohamed during the opening of the World Climate Action Summit.

ALTÉRRA, as the fund will be known, is designed to bridge the climate finance gap and aims to stimulate $250bn of investment by 2030, Sheikh Mohamed during the opening of the World Climate Action Summit.

It will allocate $25bn towards climate strategies and $5bn specifically to incentivise investment flows into the Global South, Canadian private capital group Brookfield and ALTÉRRA said in an emailed statement.

When the UAE committed to hosting COP28, we pledged to bring the world together to address shared challenges facing humanity. Today, at the COP28 World Climate Action Summit, I was honoured to announce the creation of a USD 30 billion fund that will foster transformative…

— محمد بن زايد (@MohamedBinZayed) December 1, 2023

ALTÉRRA, an ADGM-based climate-focused investment manager, was established by Lunate, a newly set up Abu Dhabi-based alternative investment manager with over $50bn assets under management.

The investment vehicle has committed $6.5bn to climate-dedicated funds for global investments in collaboration with BlackRock, Brookfield and TPG.

The UAE President said, in his opening remarks, that the COP28 climate change summit comes at a time when the world faces many challenges, with climate change affecting all aspects of life.

Sheikh Mohamed said the UAE has invested $100bn in climate action and renewable energy and is committed to investing an additional $130bn over the next seven years.

UAE accelerates climate impact

Meanwhile, the COP28 climate summit kicked off with world nations adopting a new fund to help the Global South cope with costly climate disasters.

The UAE and Germany each pledged $100m to the fund, the European Union pledged $245.4m, the UK committed GBP40m for the fund and another GBP20m for other arrangements while the $17.5m will come from the US and $10m from Japan.

The early breakthrough on the “loss and damage” fund, which the Global South has demanded for years, could help set the tone for other compromises to be made during the two-week summit.

The Atlantic Council think tank said several other demands that will be made at this year’s climate change summit include ramping up climate finance to meet the $100bn disbursed by developed countries that have been pledged under the Paris Agreement.

Until now, there hasn’t been a year where the $100bn has been met with maximum disbursements ranging from $72-80 billion per year, depending on the accounting.

Read: COP28 UAE kicks off, as global climate action takes centre stage