The United Arab Emirates has set out a $30 billion commitment to “create a fairer climate finance system”, with a particular focus on the Global South.
Altérra, the new fund, aims to mobilise $250bn globally by 2030.
COP28 President Sultan Al Jaber will chair Altérra, while Ambassador Majid Al Suwaidi, COP28 director-general, will be CEO.
“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,” said Al Jaber. “Its launch reflects the COP Presidency’s Action Agenda and the UAE’s efforts to make climate finance available, accessible and affordable.”
The investment unit will have two parts. Altérra Acceleration will have $25bn and focus on “climate investments at scale”. It will act as an anchor investor and co-investor.
Altérra Transformation will have $5bn. It will focus on risk mitigation to drive “investment flows into the Global South, directly addressing the challenges that currently limit climate investment and access to affordable capital”.
Lunate has established Altérra, which will be based in the Abu Dhabi Global Market. Altérra, BlackRock, Brookfield and TPG are the inaugural launch partners.
The first move will be an investment in 6 GW of new clean energy in India. This includes 1.2 GW of wind and solar, which will begin producing power by 2025.
Altérra is also looking at investments such as an African platform, with around 5 GW of onshore wind and solar photovoltaic (PV). Another project involves rural electrification in Latin America, which could provide power to more than 1 million people in remote areas.
Lunate is backed by Chimera Investment, linked to Sheikh Tahnoun bin Zayed Al Nahyan, brother of the UAE president. Chimera launched Lunate in September this year.
BlackRock’s part
BlackRock said the two Altérra units would invest in the BlackRock Climate Transition Vehicle. This would involve $2bn going into “climate opportunities” in BlackRock’s private debt and infrastructure equity strategies.
Altérra Acceleration will provide $1bn to BlackRock’s Climate Transition Oriented Private Debt (CPD), which launched in October. This aims to evaluate and finance mid-market companies in Europe and the US that are reducing carbon emissions.
Another $1bn will come from the two Altérra funds into BlackRock’s infrastructure plans. The Altérra Acceleration will provide $650mn fro BlackRock’s Global Infrastructure Fund IV, which acts globally and invests in decarbonising assets.
The investor also set out plans for $350mn to go into infrastructure plans in the Global South. $100mn will come from the Acceleration unit and $250mn from the Transformation.
BlackRock said the partnership would make the UAE a “focus for its transition and blended finance activities”.
Altérra CEO Al Suwaidi said the BlackRock deal was an “important moment” for the new fund. He also noted the investor’s plans to “further enhancing its on-the-ground presence in the UAE”.
Updated at 4:04 pm with details from BlackRock.