The UAE will develop 6.6 gigawatts of clean energy capacity in India, including the construction of 1,200 megawatts of wind and solar projects, Majid Al Suwaidi, Cop28 director general, has said.
The projects will be financed using the Emirates’ newly announced $30 billion fund for clean energy, which is backed by BlackRock, Brookfield and TPG.
The money will go towards a new private investment vehicle, Alterra, which aims to raise $250 billion globally in the next six years to create a fairer climate finance system.
“Alterra has already collectively committed $6.5 billion to climate-dedicated funds for global investments, including emerging markets and developing economies,” Mr Al Suwaidi told reporters during a media round-table on Friday.
The UAE is further exploring opportunities such as an African development platform with a pipeline of more than 5 gigawatts of onshore wind and solar energy projects as well as a rural electrification platform in Latin America that will provide electricity to more than one million people in remote rural areas.
“Alterra is going to be transforming the architecture of infrastructure decarbonisation for parts of the world that [are] underinvested today,” said Larry Fink, the chief executive and chairman of BlackRock, one of the world’s largest investment firms.
“I believe this is the beginning of really deploying true institutional capital alongside with governmental capital to try to really focus on making these changes,” Mr Fink said.
Developing countries require about $1.7 trillion per year in the clean energy sector but only managed to attract foreign direct investment worth $544 billion in 2022, according to the UN Conference on Trade and Development (Unctad).
With interest rates soaring globally, the cost of capital is a key barrier for energy investment in developing countries that are grappling with mounting external debt, with limited fiscal space.
Investors are also reluctant to allocate funds to climate change mitigation projects in emerging economies due to high perceived risks.
Jim Coulter, the executive chairman of TPG, said climate finance needs a “revolution” led by private capital like the one experienced by the tech sector in San Francisco, home to Silicon Valley.
“One of the things that's different between climate and technology [is that] the numbers needed in terms of capital for climate dwarfs anything that we've seen in technology. We need to supersize the effort,” Mr Coulter said.
“If we can take the skills around the world, whether they be in Africa or Asia or any of the Global South markets and supersize them and accelerate them through the private markets, we can drive innovation and change,” Mr Coulter said.
The UAE also pledged $200 million to help climate resilience in vulnerable countries, state news agency Wam reported.
The announcement follows a previous pledge of $200 million to support development in low-income countries earlier this year in Marrakesh.
Masdar strikes UK deal
Abu Dhabi clean energy company Masdar on Friday said it was part of an £11 billion ($14 billion) investment into the UK’s renewable energy sector.
The company is purchasing a 49 per cent stake in utility RWE’s 3-gigawatt Dogger Bank wind projects, one of the world’s largest planned offshore wind farms, it said in a statement.
The project could power millions of British homes, reducing emissions and creating up to 3,000 jobs.
The deal is expected to close in the first quarter of 2024, depending on regulatory approvals.