The UAE, which is hosting this year’s United Nations Climate Change Conference, has pledged $4.5 billion to help countries in Africa accelerate clean energy projects through support from government, private and development capital from UAE institutions, including the Abu Dhabi Fund for Development, the Union Export Credit Company, Abu Dhabi Future Energy Company (Masdar) and AMEA Power.
Africa may need a tenfold increase in climate change adaptation financing to $100 billion a year to help it strengthen its infrastructure and protect its agriculture from climate change, according to the Global Centre for Adaptation. While the continent produces only about 4 percent of the world’s greenhouse gas emissions, its countries are among the hardest hit by climate change.
Sultan Al Jaber, Minister of Industry and Advanced Technology and President-designate of COP28, told the Nairobi Climate Summit that in line with the directives of the UAE leadership, the COP28 Presidency is keen to work and collaborate with partners around the world to promote sustainable economic and social growth and progress.
He stressed the need to enable African countries to strengthen their capacities in the field of clean energy, through the provision of adequate climate finance.
Financing Details
The UAE initiative falls under the umbrella of Etihad 7, a development program launched by the UAE during Abu Dhabi Sustainability Week in 2022 with the support of the Ministry of Foreign Affairs, which aims to provide 100 million people across the African continent with clean electricity by 2035.
The UAE Finance Initiative will collaborate with Africa 50, an investment platform created by African governments and the African Development Bank, to address the continent’s basic infrastructure challenges by identifying projects and linking the initiative with local implementing partners.
The new initiative is in line with COP28’s ongoing efforts to call for a tripling of global renewable energy capacity by 2030 and more affordable climate finance.
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Funding will be as follows:
- Abu Dhabi Fund for Development will provide financial assistance worth one billion dollars.
- ECI will provide $500 million to reduce risk and unlock opportunities for private capital.
- Masdar pledges $2 billion and will mobilize an additional $8 billion to finance projects aimed at providing 10 gigawatts of clean energy in Africa by 2030.
- IMEA Power will help finance 5 GW of renewable energy projects on the continent by 2030, mobilizing $5 billion, including $1 billion in equity investments and $4 billion in project financing.
Al-Jaber called on African leaders to strengthen policy frameworks and regulatory legislation to attract long-term investments needed to accelerate the deployment of clean and renewable energy projects.
He pointed to a number of points that require coordinated efforts by African leaders and the international community to overcome obstacles to attracting investment, explaining that these points include restoring the financial sustainability of local utilities, modernizing basic energy infrastructure, clarifying development processes and procedures, overcoming routine barriers that delay companies’ entry into the market, in addition to removing restrictions on capital flows and access to adequate and affordable risk mitigation measures.
The UAE initiative will prioritize investments across Africa, with clear strategies for an orderly, responsible and equitable energy transition, enhanced regulatory frameworks, and a master plan to develop electricity grid infrastructure to connect and align supply and demand.
600 million people live without a source of electricity in sub-Saharan Africa alone, and greater access to clean energy would drive social and economic development in Africa, which receives only about 2 percent of global investment in renewable energy and less than a quarter of the $60 billion the continent needs annually by 2030.
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