The UAE has pledged $4.5 billion in a financial initiative to fast-track clean-energy projects in Africa.
This is according to COP28 President-Designate Sultan Al Jaber, an announcement coming ahead of United Nations climate summit to be hosted by Dubai.
“The initiative will prioritise investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks and a master plan for developing grid infrastructure,” COP28 President-Designate Sultan Al Jaber, said at the first Africa Climate Summit on Tuesday in Nairobi, Kenya.
The COP28 President-Designate also highlighted multiple action points that require the coordinated efforts of African leaders and the international community to reduce barriers to investment.
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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.
“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,” Al Jaber said.
Abu Dhabi’s clean-energy company Masdar, the Abu Dhabi Fund for Development, the Etihad Credit Insurance and the Dubai-based renewable energy company AMEA Power will provide the funding.
Also, Africa50, an investment platform established by African governments and the Africa Development Bank, has also joined the initiative.
The Abu Dhabi Fund for Development will provide $1 billion of financial assistance, while the Etihad Credit Insurance will provide $500 million of credit insurance to reduce risk and unlock private capital.
Masdar is pledging the sum of $2 billion of equity and will mobilise an additional $8 billion in project finance targeted to deliver 10 gigawatts of clean energy capacity in Africa by 2030.
AMEA Power will help fund 5 gigawatts of renewable energy capacity in the continent by 2030, mobilising $5 billion, with $1 billion in equity investments, and $4 billion from project finance.
African Development Bank’s Africa50 investment platform will act as a strategic partner to help identify initial projects, according to a statement.
The news comes a day after the UAE Carbon Alliance pledged an intended purchase of $450 million in African carbon credits by 2030 from the Africa Carbon Markets Initiative (ACMI) at the African Climate Summit, which is being held in Nairobi.
The ACMI was launched at Egypt’s COP27 summit last year to boost the continent’s carbon credit production 19-fold by 2030.
