COP28 President-Designate Dr Sultan Al Jaber has announced a UAE finance initiative that will provide $4.5bn to help tap Africa’s clean energy potential.
The announcement was made during his keynote address at the inaugural African Climate Summit in Nairobi, Kenya.
The landmark initiative brings together vital public, private, and development capital from UAE institutions, ranging from Abu Dhabi Fund for Development (ADFD) and Etihad Credit Insurance (ECI) to Masdar and AMEA Power.
Africa50, which is an investment platform established by African governments and the Africa Development Bank, has also joined the UAE finance initiative.
Africa50 was founded to help solve the continent’s critical infrastructure challenges and will help identify initial projects and connect to local implementing entities.
Call to climate action
The COP28 President Designate has repeatedly called for the global tripling of renewable energy by 2030 and has pushed to make finance more available, accessible and affordable.
The announcement came with a clear call to action for African leaders to improve policy and regulatory frameworks to attract the long-term investments necessary to accelerate the deployment of clean and renewable energy.
In order to reduce barriers to investment, the President-Designate highlighted multiple action points that require the coordinated efforts of African leaders and the international community.
These include restoring the financial sustainability of local utilities and modernising basic energy infrastructures, clarifying development processes and eliminating the red-tape delaying market lead-time, in addition to eliminating restrictions to capital flows and accessing adequate and affordable risk mitigation measures.
During his address, the COP President Designate said: “This initiative builds on the UAE’s track record of commercially driven, innovative blended finance solutions that can be deployed to promote the adoption of clean energy in emerging and developing nations. This multi-stakeholder partnership approach is designed to accelerate sustainable economic progress, address the challenge of climate change and stimulate low carbon growth.”
He added: “The initiative will prioritise investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks and a master plan for developing grid infrastructure that integrates supply and demand. In short, this initiative is designed to work with Africa, for Africa. It aims to clearly demonstrate the commercial case for clean investment across this continent. And it will act as a scalable model that can be replicated to help put Africa on a superhighway to low carbon growth.”
Action agenda
Fast-tracking the energy transition, fixing climate finance, focusing on people, lives and livelihoods, and underscoring these efforts with full inclusivity are the key pillars of the COP28 Presidency’s ‘Action Agenda’.
In sub-Saharan Africa alone, 600 million people live without access to electricity. Delivering greater access to clean energy will drive social and economic development but currently investment in African renewables represents only 2 per cent of the global total, and less than a quarter of the $60bn a year the continent needs by 2030.
The initiative aims to right this imbalance by bringing together key stakeholders to fast track the development and delivery of infrastructure, generation and distribution solutions.
UAE finance initiative to be part of Etihad 7
The initiative will be part of Etihad 7, a development platform launched by the UAE at Abu Dhabi Sustainability Week in 2022, and championed by the Ministry of Foreign Affairs (MoFA).
Etihad 7 aims to provide 100 million people across the African continent with clean electricity by 2035.
ADFD is supporting with $1bn of financial assistance to address basic infrastructure needs, offer finance solutions and increase mobilisation of private investments. The ECI is providing $500m of credit insurance to de-risk and unlock private capital.
Masdar, active in 22 countries in Africa, is committing an additional $2bn of equity as part of the new initiative. Masdar will mobilise an additional $8bn in project finance and through its Infinity Power platform.
Masdar will target the delivery of 10 gigawatts (GW) of clean energy capacity in Africa by 2030.
AMEA Power is targeting 5GW of renewable energy capacity in the continent by 2030, mobilising $5bn, of which $1bn will come from equity commitment, and $4bn from project finance.
Additionally, the initiative seeks to create pathways for other multilateral development banks, governments, and philanthropies to enable additional private sector investment. The COP28 Presidency has also called on international financial institutions and foundations to join the effort.
The announcement comes days before the United Nations Framework Convention on Climate Change (UNFCCC) is due to release the technical data around the first ‘Global Stocktake’ of climate progress since the 2015 Paris Agreement.
Credit(Gulf Times)
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