COP28 Witnesses $250 Billion Climate Finance Pledge for Southern Nations
By Faridat Salifu
In a groundbreaking move at COP28, the United Arab Emirates introduced Alterra, a revolutionary investment vehicle with a mission to mobilize $250 billion by 2030 for climate action in Southern nations. Spearheaded by Sheikh Mohamed Ben Zayed Al Nahyane’s country, the UAE has committed a substantial $30 billion in catalytic capital to kickstart this transformative initiative.
Alterra aims to bolster climate action in Southern nations globally, with a primary focus on enhancing access to financing for these regions. The UAE unveiled its commitment at Expo City in Dubai on December 1, marking a crucial stride towards advancing a more equitable climate financing system.
Under the leadership of Ambassador Majid Al Suwaidi, CEO of COP28, Alterra will be overseen by Lunate, a new alternative investment manager boasting assets totaling $50 billion on the Abu Dhabi Global Market. The investment vehicle seeks to expedite high-impact projects across the entire spectrum of the new climate economy through its innovative two-part structure.
The first part, “Alterra Acceleration,” earmarks $25 billion of institutional capital for large-scale climate investments, furthering the transition to a net-zero emissions economy. Simultaneously, the $5 billion Alterra Transformation component will provide risk mitigation capital to incentivize investment flows to Southern nations, particularly addressing barriers to climate investment and affordable capital.
Alterra’s immediate investments include the development of over 6 GW of new clean energy capacity in India, with plans to finance over 5 GW of onshore wind and solar projects in Africa. Additionally, a rural electrification platform in Latin America is in progress, aiming to provide electricity to over a million people in remote rural areas.
The announcement of Alterra at COP28 signifies a remarkable leap in global efforts to drive climate action and instigate meaningful change in climate finance for vulnerable Southern nations.