Alterra, the UAE's $30 billion climate fund, has announced plans to launch a new co-investment vehicle worth $1.2 billion with a $250 million contribution from global financial institution BBVA to advance energy transition goals.
Once launched and approved, Alterra Opportunity Fund will be domiciled at Abu Dhabi finance hub ADGM. It will consolidate existing co-investments into a dedicated structure to support its next phase of growth, Alterra said in a statement.
The strategic partnership between Alterra and BBVA was announced during Abu Dhabi Sustainability Week.
The new fund aims to pursue a diversified global investment strategy across climate-aligned infrastructure, private equity and private credit. It will focus on energy transition, industrial decarbonisation, climate tech and sustainable living.
The regions it will target include North America, Latin America and Europe, in addition to other growth markets.
“This fund marks a new chapter for Alterra as we move into our next stage of growth and deepen our ability to mobilise and deploy global capital towards high-impact investments,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and chairman of Alterra.
“Our partnership with BBVA marks an important step in strengthening global collaboration in clean energy, sustainable infrastructure and technology investments, allowing us to continue to back high-quality opportunities delivering long-term value.”
Launched during Cop28 in Dubai, Alterra aims to raise $250 billion by 2030 to finance projects that support global energy transition.
It operates through two funds, including the $25 billion Acceleration Fund that directs capital towards projects crucial for accelerating the global transition to a net-zero. Its $5 billion Transformation Fund incentivises investment flows in high-growth climate opportunities in underserved markets by providing catalytic capital.
The announcement of Alterra's new fund comes as countries across the globe boost investments in energy transition to cut emissions.
In 2024, the world added 582 gigawatts of renewable power, with investments reaching about $800 billion, according to the International Renewable Energy Agency. However, renewable energy deployment has remained geographically uneven, with many developing countries left behind.
Looking ahead, global renewable power capacity is expected to double between 2025 and 2030, the International Energy Agency said in a report last year. In more than 80 per cent of countries worldwide, renewable power capacity is set to grow faster between 2025 and 2030 than it did over the previous five-year period, the IEA said. However, challenges including grid integration, supply chain vulnerabilities and financing are also increasing.
BBVA, which is active in more than 25 countries, aims to strengthen its presence “in fast-growing climate finance hubs such as Abu Dhabi”, according to BBVA chairman Carlos Vila.
The company was recently granted In-Principle Approval by ADGM’s Financial Services Regulatory Authority to open a new branch in Abu Dhabi to expand its wholesale banking offering and serve corporate and institutional clients locally.
It aims to channel €700 billion ($814.7 billion) in sustainable business between 2025 and 2029, after having met its previous €300 billion target one year in advance.
In addition to the $250 million investment in Alterra, the bank has so far invested about €300 million in climate funds focused on decarbonisation, as part of its continuing global climate strategy.
