As COP28 commenced, the United Arab Emirates (UAE) made a historic announcement, committing a staggering US$30 billion to ALTÉRRA, a catalytic climate vehicle aimed at reshaping global climate finance. This transformative initiative, termed the world’s largest private investment vehicle for climate change action, signals a concerted effort to address the pressing need for equitable climate finance and enhance accessibility for the Global South.
With this substantial commitment, ALTÉRRA seeks to mobilize an ambitious US$250 billion globally by 2030. Focused on steering private markets towards climate investments, ALTÉRRA will concentrate on transforming emerging markets and developing economies, where traditional investments have been scarce due to perceived risks.
Addressing the current inadequacies in climate finance availability, accessibility, and affordability, the COP28 Presidency, led by President Dr. Sultan Al Jaber, made fixing climate finance a central pillar of its Action Agenda. Dr. Al Jaber, who chairs ALTÉRRA’s Board, highlighted this initiative as a “defining moment” in creating a new era of international climate finance.
Ambassador Majid Al Suwaidi, COP28 Director-General and ALTÉRRA’s Chief Executive Officer, emphasized the critical role ALTÉRRA plays in the UAE’s larger vision to establish a global green finance ecosystem. The vehicle aims to stimulate and empower the growth of a new climate economy, creating a vibrant climate investment landscape.
ALTÉRRA introduces an innovative two-part structure: ALTÉRRA ACCELERATION, a US$25 billion component, will act as an anchor investor and co-investor in climate strategies, steering institutional capital towards impactful climate investments. Meanwhile, ALTÉRRA TRANSFORMATION, a US$5 billion component, will provide risk mitigation capital to incentivize investment flows into the Global South, addressing challenges that limit climate investment and access to affordable capital.
In collaboration with partners like BlackRock, Brookfield, and TPG, ALTÉRRA has committed US$6.5 billion to climate-dedicated funds for global investments, with a focus on the Global South. The partners are expected to mobilize capital from other institutional investors and global entities.
ALTÉRRA’s initial commitment will channel immediate capital investment into developing over 6.0 GW of new clean energy capacity in India. This includes the construction of 1,200 MW of wind and solar projects slated to begin producing clean power by 2025.
The vehicle and its partners are actively exploring additional investment opportunities, such as an African development platform with a pipeline of 5GW+ of onshore wind and solar PV energy projects. Additionally, a rural electrification platform in Latin America aims to provide electricity to over 1 million people in remote areas.
ALTÉRRA will implement a Climate Impact Framework, aligning with international best practices, ensuring accountability, and driving positive climate transformation. This initiative adds to the UAE’s track record of managing large investment platforms and contributing to the global shift towards a low-carbon economy.
As COP28 unfolds at Expo City Dubai from November 30 to December 12, 2023, the focus on revolutionizing climate finance remains central to the global climate agenda.
