COP28 plans $4.5bn funding for African clean energy
The COP28 President-Designate, Dr Sultan Al Jaber, has announced a United Arab Emirates finance initiative that will provide $4.5bn to help unlock Africa’s clean energy potential.
The announcement was made during a keynote address at the inaugural African Climate Summit in Nairobi, Kenya.
It said the landmark initiative brings together vital public, private, and development capital from UAE institutions, notably from Abu Dhabi Fund for Development, Etihad Credit Insurance, Masdar, and AMEA Power.
According to a statement, Africa50, which is an investment platform established by African governments and the Africa Development Bank, has also joined the UAE finance initiative.
It noted that Africa50 was founded to help solve the continent’s critical infrastructure challenges and will help identify initial projects and connect to local implementing entities.
The COP28 President Designate has repeatedly called for the global tripling of renewable energy by 2030 and has pushed to make finance more available, accessible, and affordable.
The announcement came with a clear call to action for African leaders to improve policy and regulatory frameworks to attract the long-term investments necessary to accelerate the deployment of clean and renewable energy.
He said, “To reduce barriers to investment, the President-Designate highlighted multiple action points that require the coordinated efforts of African leaders and the international community.”
During his remarks, the COP President Designate said, “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.”
He added that this multi-stakeholder partnership approach was designed to accelerate sustainable economic progress, address the challenge of climate change, and stimulate low carbon growth.”
He said, “The initiative will prioritise investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks and a master plan for developing grid infrastructure that integrates supply and demand.”
According to the statement, in sub-Saharan Africa alone, 600 million people live without access to electricity. Delivering greater access to clean energy will drive social and economic development but currently investment in African renewables represents only 2 per cent of the global total, and less than a quarter of the $60bn a year the continent needs by 2030.
It further explained that the initiative seeks to correct the imbalance by bringing key stakeholders together to accelerate the development and delivery of infrastructure, generation, and distribution solutions to close the gap in universal clean energy access.
“The initiative will sit under the umbrella of Etihad 7, a development platform launched by the UAE at Abu Dhabi Sustainability Week in 2022 and championed by the Ministry of Foreign Affairs. Announced in 2022, Etihad 7 aims to provide 100 million people across the African continent with clean electricity by 2035,” it stated.
It further stated that the Abu Dhabi Fund for Development and the Etihad Credit Insurance, are kick-starting this initiative through funding the initial investment intended to catalyse private sector action.
However, it noted that ADFD was supported with $1bn of financial assistance to address basic infrastructure needs, offer innovative finance solutions and increase mobilisation of private investments.
Also, it mentioned that the ECI was providing $500m of credit insurance to de-risk and unlock private capital further demonstrating ECI’s commitment towards global sustainable development.