New Delhi: The United Arab Emirates’ (UAE) newly-launched climate investment fund, ALTÉRRA, will develop 6 GW of new clean energy capacity in India. “From the vehicle’s initial commitment, immediate capital investment has been earmarked for the development of over 6.0 GW of new clean energy capacity in India. This includes the construction of 1,200 MW of wind and solar projects that will begin producing clean power by 2025,” said an official statement on Friday.
On the second day of the COP28 Summit in Dubai, the UAE launched a catalytic climate vehicle, ALTÉRRA, and announced a US $30 billion investment into the fund. ALTÉRRA “will drive forward international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South,” said the statement.
“With this US$30 billion commitment, ALTÉRRA becomes the world’s largest private investment vehicle for climate change action and will aim to mobilise US$250 billion globally by 2030,” said the statement. It aims to steer private markets towards climate investments and focus on transforming emerging markets and developing economies, where traditional investment has been lacking due to the higher perceived risks across those geographies.
“Finance for climate action is not currently available, accessible or affordable enough where it is needed. By 2030, emerging markets and developing economies will require US $2.4 trillion every year to address climate change. That is why COP28 made fixing climate finance a key pillar of its Action Agenda and has worked to deliver ambitious solutions, including mobilising private markets at scale,” said the statement. The launch of the vehicle was described by COP28 President Dr Sultan Al Jaber as a “defining moment” in the creation of a new era of international climate finance.
Dr Al Jaber, who will chair ALTÉRRA’s Board, added: “ALTÉRRA provides a transformational solution for attracting private capital. Its scale and structure will create a multiplier effect in climate focused investment, making it a vehicle like no other. Its launch reflects the COP Presidency’s Action Agenda and the UAE’s efforts to make climate finance available, accessible and affordable.”
Ambassador Majid Al Suwaidi, COP28 Director-General, will serve as ALTÉRRA’s Chief Executive Officer.
ALTÉRRA will have a team of specialist climate investment professionals who bring a strong track record of investing in emerging and developing markets. The fund has been established by Lunate, an independent global investment manager, and is domiciled in the Abu Dhabi Global Market. ALTÉRRA will have an innovative two-part structure to spur new ideas, incentivise policy and regulatory frameworks, and identify solutions to rapidly deploy capital across the entire value chain of the new climate economy. It has a dedicated investment focus on supporting four key priorities that underpin COP28’s Action Agenda, namely: Energy Transition, Industrial Decarbonisation, Sustainable Living and Climate Technologies.
ALTÉRRA, in collaboration with BlackRock, Brookfield and TPG as inaugural launch partners, has committed US$6.5 billion to climate-dedicated funds for global investments, including the Global South. The partners are expected to mobilize capital from other institutional investors, and global entities. The vehicle and its launch partners are actively exploring a range of additional investment opportunities, including an African development platform with a pipeline of 5GW+ of onshore wind and solar PV energy projects and a rural electrification platform in Latin America that will provide electricity to over 1 million people in remote rural areas and with growth potential.
