Green energy in Africa will receive a significant boost as the UAE is set to fuel Africa’s potential with a USD 4.5 billion finance initiative, fostering collaboration between public, private, and development sectors. COP28 President-Designate Dr. Sultan Al Jaber revealed the transformative plan during the inaugural African Climate Summit held in Nairobi, Kenya.
Africa’s green energy potential
COP28 President-Designate Dr. Sultan Al Jaber has unveiled a groundbreaking finance initiative, earmarking USD 4.5 billion to harness Africa’s burgeoning clean energy capabilities. This initiative is the result of a collaborative effort among prominent UAE institutions, including the Abu Dhabi Fund for Development (ADFD), Etihad Credit Insurance (ECI), Masdar, and AMEA Power. Furthermore, Africa50, a prominent investment platform backed by African governments and the Africa Development Bank, have joined with the UAE to propel the endeavor.
A call to climate action
Dr. Al Jaber, who assumes the role of COP28 President, has consistently advocated for tripling global renewable energy production by 2030 while emphasizing the importance of making finance readily accessible and affordable.
To reduce impediments to investment, the President-Designate has outlined a comprehensive action plan necessitating coordinated efforts from African leaders and the international community. This includes restoring the financial stability of local utilities, modernizing essential energy infrastructure, streamlining development processes, and eliminating bureaucratic hurdles delaying market progress. Furthermore, the initiative aims to remove capital flow restrictions and ensure access to adequate and affordable risk mitigation measures.
A multi-stakeholder approach
Dr. Al Jaber emphasized the UAE’s track record in pioneering commercially driven, innovative blended finance solutions, tailored to promote clean energy adoption in emerging and developing nations. This multi-stakeholder partnership is designed to accelerate sustainable economic progress, combat climate change, and stimulate low-carbon growth. The initiative’s priority is to invest in African countries with clear transition strategies, robust regulatory frameworks, and a master plan for integrated grid infrastructure development.
Building a sustainable future for Africa
Fast-tracking the energy transition, rectifying climate finance, prioritizing people’s well-being, lives, and livelihoods, and ensuring inclusivity form the core pillars of the COP28 Presidency’s ‘Action Agenda.’ In sub-Saharan Africa, where 600 million people lack access to electricity, expanding clean energy access promises to drive social and economic development. Currently, investment in African renewables accounts for only 2% of the global total, falling far short of the USD 60 billion required annually by 2030.
Etihad 7
This initiative will be an integral part of Etihad 7, a development platform launched by the UAE at the Abu Dhabi Sustainability Week in 2022, championed by the Ministry of Foreign Affairs (MoFA). Etihad 7’s ambitious objective is to provide clean electricity to 100 million people across the African continent by 2035. ADFD is pledging USD 1 billion in financial assistance to address critical infrastructure needs, provide financing solutions, and mobilize private investments. Meanwhile, ECI has committed USD 500 million in credit insurance to mitigate risk and unlock private capital.
Masdar’s commitment
Masdar, with a presence in 22 African countries, pledged an additional USD 2 billion in equity as part of this initiative. It intends to mobilize an additional USD 8 billion in project finance through its Infinity Power platform. Masdar has set its sights on delivering 10 gigawatts (GW) of clean energy capacity in Africa by 2030.
AMEA Power
In addition, AMEA Power has ambitious plans to contribute 5GW of renewable energy capacity to the continent by 2030, with USD 1 billion from equity commitment and USD 4 billion from project finance.
These announcements come just days before the United Nations Framework Convention on Climate Change (UNFCCC) is set to release the technical data for the first ‘Global Stocktake’ of climate progress since the 2015 Paris Agreement.
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