The Abu Dhabi Fund for Development and Masdar have committed to supporting the International Renewable Energy Agency (Irena)’s $1 billion Energy Transition Accelerator Financing platform, which aims to support new renewable energy projects in developing countries.
The fund signed an agreement to provide the anchor investment of $400 million on Thursday after committing to investing the amount when the Etaf platform was launched by the UAE and Irena during the Cop26 summit in Glasgow last year.
Clean energy company Masdar will also join the platform to provide equity investments in developing renewable energy projects.
The Etaf platform aims to finance 1.5 gigawatts of new renewable energy projects in developing countries by 2030.
The platform “will enable Irena to facilitate capital mobilisation and significantly accelerate the energy transition in developing countries”, said Francesco La Camera, the director general of Irena.
“Abu Dhabi Fund for Development will operate through concessional loans and Masdar through equity, and other partners will join soon.”
Globally, new renewable power capacity rose by 6 per cent in 2021 to a record 295 gigawatts, shaking off the rising cost of raw material, pandemic-driven construction delays and global supply chain challenges, the International Energy Agency said in its latest Renewable Energy Market update last month.
This year, the agency expects global capacity additions to rise another 8 per cent to 320 gigawatts as governments around the globe focus on developing new clean energy projects to cut emissions.
“The Etaf platform supports the strategic objective of the UAE to unite global efforts to address climate change through the promotion of renewable energy,” said the fund's director general Mohammed Al Suwaidi.
“ADFD’s funding supports the objectives of the platform, as it attracts new investment and provides innovative solutions and financing tools to promote renewable energy in developing countries.”
With the Etaf contribution, the fund's total financing for renewable energy projects has increased to $1.8bn, Irena said in a statement last year.
The fund is an autonomous national entity affiliated with the emirate’s government that finances projects in developing countries. It completed renewable energy projects worth Dh117.3m in 2020 in a number of locations, including Cuba, Somalia, the Bahamas, Barbados, and Saint Vincent and the Grenadines.
Abu Dhabi-based Masdar is already active in a number of countries around the world through its renewables portfolio. It aims to reach a total renewable capacity of 100 gigawatts in the future from 15 gigawatts at the end of 2021.
Last year, Masdar entered new markets including Azerbaijan, Armenia, Georgia, Greece, Iraq and Poland, extending its renewable energy investments to more than 40 countries with a combined value of more than $20bn.
“By joining the Etaf platform, Masdar leverages its extensive expertise as an international renewable energy project developer and operator to increase bankability and attract investors to Etaf projects,” Irena said.