Emirates Development Bank, the state-owned lender that provides financing for the UAE’s priority sectors, has signed an agreement to provide financial support of up to Dh1.3 billion ($350 million) to support the International Renewable Energy Agency’s Energy Transition Accelerator Financing platform.
The platform is designed to back new renewable energy projects in developing countries.
Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Cop28 president-designate and EDB chairman, and Francesco La Camera, director-general of Irena, witnessed the signing of the partnership.
“This agreement is a significant milestone in helping to provide adequate climate financing to drive global investments that meet the 2030 global goals and fast-track a just, equitable, orderly and responsible energy transition,” Dr Al Jaber said.
“The UAE is one of the largest investors globally in renewable energy, having invested Dh183.5 billion in renewable energy projects in 70 countries.”
EDB, which became operational in June 2015, is a key financial engine for the economic development and industrial advancement of the UAE.
The Etaf platform, supported by the UAE and Abu Dhabi-based Irena, has surpassed its initial target of $1 billion by the end of the decade.
Investments in renewable energy technology reached a record $1.3 trillion last year but that figure must rise to about $5 trillion annually to meet the Paris Accord target of limiting temperature increases to 1.5°C above pre-industrial levels, Irena said in its World Energy Transitions Outlook 2023 preview.
Renewable capacity must grow from about 3,000 gigawatts now to more than 10,000 gigawatts in 2030, at an average rate of 1,000 gigawatts annually, it said.
Under the agreement, EDB will provide financing for projects recommended by Irena, which are aligned with the Paris Agreement and the UN's sustainable development goals through the Etaf platform, EDB said.
It will also bring its project financing expertise and collaborate with other Etaf partners to ensure financing of the selected projects.
The new agreement builds on the partnership between the UAE and Irena, including the Emirates’ commitment to contribute Dh1.46 billion provided by the Abu Dhabi Fund for Development to support the Etaf’s goal of mobilising funds, targeting a total deployment of an additional 1.5 gigawatts of clean renewable energy generation and storage by 2030, according to the EDB.
“Due to rapidly falling costs, renewable energy has become the most cost-effective climate solution available to address rising emissions and growing energy demand,” Mr La Camera said.
“This is why we are advocating for a tripling of global renewable power by 2030, a key step to limit temperature rise to 1.5°C.”