The United Arab Emirates (UAE) has pledged a substantial $4.5 billion investment to accelerate clean energy initiatives across Africa. This landmark commitment was announced by COP28 President-Designate Sultan Al Jaber during the Africa Climate Summit currently taking place in Nairobi, Kenya.
The UAE’s commitment to advancing global climate action is embodied in its ambitious climate initiative. This initiative is being championed by prominent UAE organizations, including Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, and AMEA Power, a leading Dubai-based renewable energy company. These organizations will jointly provide the funding, as announced by the COP28 Presidency.
A breakdown of the commitment is as follows:
- The Abu Dhabi Fund for Development will provide $1 billion of financial assistance.
- The Etihad Credit Insurance will provide $500 million of credit insurance to reduce risk and unlock private capital.
- Masdar is pledging $2 billion of equity and will mobilize 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, mobilizing $5 billion, with $1 billion in equity investments, and $4 billion from project finance.
While Africa accounts for only about 4 percent of the world’s greenhouse gas emissions, the continent bears the brunt of climate change impacts. Rising temperatures, erratic rainfall patterns, and extreme weather events are affecting African nations, posing challenges to agriculture, infrastructure, and overall development. To address these issues, substantial investments in clean energy and climate resilience are essential.
The funding will be directed toward clean energy projects and climate adaptation initiatives. Specifically, the funds will help African countries bolster their infrastructure, enhance regulatory frameworks, and develop grid infrastructure to support the transition to renewable energy sources.
To ensure the effective utilization of these funds, the African Development Bank’s Africa50 investment platform will serve as a strategic partner. This collaboration will help identify and advance suitable projects that align with Africa’s sustainable development goals and climate action strategies.
The UAE’s commitment to investing in Africa’s clean energy future comes at a crucial juncture. The Global Center on Adaptation has indicated that Africa may require nearly ten times its current climate adaptation funding, reaching $100 billion annually. This funding gap underscores the urgency of international support for African nations as they strive to build climate-resilient economies.
