Today's Edition
Mays Ibrahim (ABU DHABI)
UAE-backed climate investment funds are delivering on their promise to transform global climate capital, positioning the UAE as a premier hub for climate investment.
Altérra, as well as Global Climate Finance Centre (GCFC), are making significant strides toward scaling up climate action, with a clear focus on the Global South, where the need for investment is greatest.
At a panel discussion on Thursday during the Abu Dhabi Sustainable Finance Forum (ADSFF), part of Abu Dhabi Finance Week (ADFW), leaders from both initiatives reported on their progress and future plans to accelerate the flow of capital into climate solutions.
With a $30 billion commitment from the UAE, Altérra is the world's largest private climate investment fund, aiming to mobilise $250 billion for climate action by 2030.
With a growing portfolio of projects focused on climate action in emerging markets, Majid Al Suwaidi, CEO of Altérra, affirmed that the fund is an extension of the UAE's vision to achieve sustainable economic growth.
Altérra aims to direct significant finance toward the Global South, where emissions are concentrated but climate finance is scarce, he noted.
In 2023, only 0.5% of global sustainability investment went to this region, according to Al Suwaidi.
"If we want to bring global temperatures down, we need to bring finance up," he said.
Over the past year, the fund, in partnership with Brookfield, TPG and BlackRock, has raised significant capital and developed three new strategies aimed at accelerating investment in the Global South.
Mercedes Vela Monserrate, CEO of GCFC, delved into how this centre complements Altérra's work, ensuring accountability and transforming climate finance announcements into tangible outcomes.
The GCFC is a collaborative initiative launched at COP28 in partnership with entities like ADGM, ADQ, BlackRock, HSBC and the World Bank.
Monserrate explained that the GCFC has been tasked with overseeing three key initiatives launched at COP28 - the Global Climate Finance Framework which has been signed by 15 countries and accounts for 40% of the global GDP; the African Green Investment Initiative (a $4.5 billion programme); and Innovate for Climate Tech which raises venture capital for climate startups.
The GCFC is also working to establish the necessary regulatory frameworks, transparency, and data infrastructure to support climate finance and de-risk investments in emerging markets, ultimately making climate finance "available, affordable and accessible", she added.
According to Al Suwaidi, the key to scaling up climate finance is to keep things simple. Investors want clear, transparent vehicles for investing in the Global South, he said.
Through its investments, Altérra aims to lead by example, showing institutional investors that the Global South is not only a region of need, but a region of opportunity.
"We need to shift the climate conversation from a conversation about what we're taking away from people to what we're giving people, and finance can do that," he said.
The fund's investments span across various sectors, including clean energy, climate technology, industrial decarbonisation and sustainable living, according to Monserrate.
Monserrate echoed his sentiments, noting that climate finance is one of the greatest investment opportunities of this generation, which must be accelerated through mobilisation of capital, measurable impact and performance.
"We need to ensure that every single dollar is being measured and come up with a clear outcome. And on performance, we need to ensure that climate finance not only delivers on environmental but also on financial returns, establishing itself as a mainstream investment strategy," she said.
