According to sources familiar with the situation, the United Arab Emirates will launch a $30bn fund to invest in climate change with BlackRock TPG and Brookfield.
The UAE is launching the campaign to boost its credentials as the host of COP28 during the first days UN summit.
Three people involved in the discussions confirmed that Lunate Capital will be overseeing a fund of at least $5bn for investments in Global South nations.
The UAE has vast resources as it is one of the largest oil and gas producers in the world. Global SWF estimates that the nation has assets totaling $2.5tn between its central bank, sovereign wealth fund and pension funds.
The COP28 President Sultan al-Jaber said repeatedly that climate finance was a major focus of the summit. It began on Thursday in Dubai. Up to 180 heads or state are expected to attend Expo City in the next two week.
reported that the UAE is putting together an investment fund worth billions of dollars. According to an analysis, the UAE has invested almost $200bn this year, mostly in green energy.
Since being selected as the COP28 hosts a year back, the UAE has been under scrutiny over questions about whether one of the largest oil and gas producers in the world should oversee global climate negotiation.
A leading figure in climate financing called the investment funds a “serious sum” that aims to position the UAE as a centre of climate finance on a global scale.
Developing countries, in particular, struggle to raise the money to switch their energy systems and economics from fossil fuels towards greener sources of power. The world is also short of cash to adapt its economies to hotter temperatures.
UN research from 2021 concluded that $125tn in climate investments would be required by 2050 to meet the Paris Agreement goals and reduce emissions. According to the International Energy Agency, $4.5tn per year will be required for clean energy by early 2030s. This is up from $1.8tn currently.
The IMF, World Bank, and other multilateral banks have been heavily reformed in recent years to redirect more money towards climate change. However, there is also a growing call for the private sector, working with public finance, to invest green projects.
Lunate, the first of its kind in the Gulf State’s history, was launched this year with the support of Sheikh Tahnoon bin Zayed al-Nahyan. He is the brother of Sheikh Mohammed bin Zayed al-Nahyan. Lunate belongs to Chimera Investment, its management and senior staff.
Lunate announced in September that Khalifa al Suwaidi would be one the three managing partners. He will join Murtaza Hussain as chief investment officer of Abu Dhabi wealth fund ADQ and Seif Fikry, CEO of private investment company Chimera.
Brookfield, BlackRock, and TPG all declined to comment. Representatives of COP28 also declined to make a comment.