UAE commits $30 billion to climate change action vehicle ALTÉRRA at COP28, ET EnergyWorld

New Delhi: The United Arab Emirates has announced a substantial commitment of US$30 billion to the newly established climate finance vehicle, ALTÉRRA, during the COP28 summit. This move positions ALTÉRRA as the world’s largest private investment initiative aimed at climate change action, with a target to mobilize US$250 billion globally by 2030.

Focused on rectifying the current challenges in climate finance, particularly in the Global South, ALTÉRRA intends to guide private investments towards climate change projects in emerging markets and developing economies. These regions have traditionally seen minimal investment due to perceived higher risks.

The COP28 summit has identified the reformation of climate finance as a crucial component of its Action Agenda. ALTÉRRA is a direct response to this agenda, aiming to improve the availability, accessibility, and affordability of climate finance.

The announcement was made by COP28 President Dr. Sultan Al Jaber, who described the launch of ALTÉRRA as a “defining moment” for international climate finance. Dr. Al Jaber, also the appointed chair of ALTÉRRA’s Board, highlighted the vehicle’s transformative potential: “ALTÉRRA 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.”

ALTÉRRA, established by the independent global investment manager Lunate and domiciled in the Abu Dhabi Global Market, will be led by Ambassador Majid Al Suwaidi as Chief Executive Officer. The team comprises specialists in climate investment with a strong background in emerging and developing markets.

The vehicle is divided into two components: ALTÉRRA ACCELERATION, with US$25 billion dedicated to steering institutional capital towards large-scale climate investments, and ALTÉRRA TRANSFORMATION, with US$5 billion aimed at mitigating risks and incentivizing investments in the Global South. This structure is aligned with COP28’s message of inclusivity and aims to leverage concessional finance to attract more climate investment to Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

In collaboration with BlackRock, Brookfield, and TPG as initial launch partners, ALTÉRRA has committed US$6.5 billion to climate-focused funds for global investments. This includes immediate capital investment for over 6.0 GW of new clean energy capacity in India, with plans for further investments in Africa and Latin America.

ALTÉRRA’s approach is underpinned by a Climate Impact Framework, ensuring alignment with international climate objectives and maintaining accountability and transparency. This initiative represents a significant effort by the UAE to lead in the development of a global green finance ecosystem, promoting the growth of a new climate economy and addressing the urgent need for climate change action.

  • Published On Dec 1, 2023 at 05:36 PM IST

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