UAE Unveils 30B Dollar: United Arab Emirates President Sheikh Mohammed Bin Zayed Al Nahyan, playing a pivotal role as the host of the COP28 climate summit, made a significant announcement on Friday. He unveiled the establishment of a substantial $30 billion climate fund named ALTÉRRA, designed to foster global climate solutions. The ambitious objective is to attract $250 billion in investment by the conclusion of this decade.
ALTÉRRA’s allocation involves a substantial $25 billion directed towards climate strategies, with an additional $5 billion earmarked specifically to incentivize investment flows into the Global South. This strategic move aligns with a broader effort to address climate challenges in regions that traditionally faced challenges attracting significant investments due to perceived higher risks.
What makes ALTÉRRA particularly noteworthy is the collaboration with prominent global asset managers, including BlackRock, Brookfield, and TPG. Together, they have committed a substantial $6.5 billion to climate-dedicated funds, encompassing global investments and a special focus on the Global South. The fund’s explicit goal is to guide private markets towards climate investments, emphasizing the transformation of emerging markets and developing economies.
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The announcement reflects a proactive approach by the UAE, recognizing the global imperative to address climate change. This move comes amid the country’s controversial plans to expand its oil and gas production, raising eyebrows within the climate community. However, the establishment of ALTÉRRA signals a commitment to mobilize financial resources and business involvement in the critical fight against climate change.
Lunate, a recently established Abu Dhabi-based alternative investment manager boasting an asset portfolio exceeding $50 billion, played a pivotal role in the establishment of ALTÉRRA. Lunate is owned by its senior management and Chimera Investment LLC, a key player in the business empire overseen by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and the president’s brother.
The UAE’s move to create a substantial climate fund underscores its determination to contribute meaningfully to global efforts despite its reliance on fossil fuels. As the world closely observes developments at the COP28 summit, the establishment of ALTÉRRA positions the UAE as a player committed to driving positive change and actively participating in the global fight against climate change.
Our Reader’s Queries
What is the climate fund in the UAE?
President Al Jaber made a significant announcement just days before the summit, unveiling a new climate fund aimed at reducing criticism. The UAE has committed to investing $30 billion in the fund, with the ultimate goal of attracting $250 billion in investments by 2030. This long-term initiative is a crucial step towards addressing climate change and promoting sustainable practices.
What is the climate in the UAE?
The United Arab Emirates boasts an arid desert climate that experiences two primary seasons: winter and summer. These seasons are separated by two transitional periods. The winter season, which spans from December to March, typically sees a mean temperature range of 16.4°C to 24°C.
What is the climate finance gap?
In simpler terms, there is a significant shortfall in funding for the necessary climate transition. The current commitment of $100 billion per year from donor countries falls far short of the required $2.4 trillion per year by 2030. This gap must be addressed in order to effectively combat climate change.