ALTÉRRA, a ‘defining moment’ for climate finance: COP28 President

Dr Sultan Bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and COP28 President, said that ALTÉRRA, the catalytic climate vehicle announced on Friday, reflects the COP Presidency’s Action Agenda and the UAE’s efforts to make climate finance available, accessible and affordable. The launch of the vehicle was described by Dr Al Jaber as a “defining moment” in the creation of a new era of international climate finance.

He made this statement while addressing world leaders, who have gathered for the 28th UN Climate Change Conference (COP28), during which the UAE announced a $30 billion commitment to the newly launched catalytic climate vehicle, ALTÉRRA, set to drive forward international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South.

With this $30 billion commitment, ALTÉRRA becomes the world’s largest private investment vehicle for climate change action and will aim to mobilise $250 billion globally by 2030. 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 $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.

Dr Al Jaber, who will chair ALTÉRRA’s Board, explained, “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.” 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. ALTÉRRA has been established by Lunate, an independent global investment manager, and is domiciled in the Abu Dhabi Global Market.

ALTÉRRA is one of a range of finance-led initiatives launched during COP28 to accelerate the global transition to a low-carbon economy and build climate resilience.

Ambassador Al Suwaidi, said, “ALTÉRRA is a critical element in the UAE’s efforts to create a global green finance ecosystem that stimulates and empowers the growth of a new climate economy. It will build a vibrant climate investment landscape which further catalyzes investment into the Global South.” 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 ACCELERATION, a $25 billion component of ALTÉRRA, will steer institutional capital towards climate investments at scale that have the greatest potential to accelerate the transition to a net-zero and climate-resilient economy. ALTÉRRA ACCELERATION will serve as an anchor investor and co-investor in climate strategies, allocating capital both directly and through fund partnerships to maximise its global impact.

ALTÉRRA TRANSFORMATION, a $5 billion component of ALTÉRRA, will provide risk mitigation capital to incentivise investment flows into the Global South, directly addressing the challenges that currently limit climate investment and access to affordable capital. In-line with COP28’s message of full inclusivity, ALTÉRRA TRANSFORMATION will also create opportunities to leverage concessional finance to further attract climate investment to Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

The vehicle will add to the UAE’s accomplished track record of managing large investment platforms and successfully developing and operating renewable energy projects around the world, leading change as a trusted facilitator at the global crossroads between North, South, East and West.

ALTÉRRA, in collaboration with BlackRock, Brookfield and TPG as inaugural launch partners, has committed $6.5 billion to climate-dedicated funds for global investments, including the Global South. The partners are expected to mobilise capital from other institutional investors, and global entities. ALTÉRRA will continue to expand its partnerships as it creates investment opportunities, develops innovative solutions, and deploys capital at scale.

ALTÉRRA and its partners are committed to the rapid deployment of capital in high-impact projects, particularly in emerging markets. 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.