The International Renewable Energy Agency (IRENA), and the United Arab Emirates (UAE), yesterday, announced a $1 billion facility to accelerate the transition to renewable energy in developing countries.
The funding, announced at the COP26, in Glasgow, Scotland, is being executed under the Energy Transition Accelerator Financing (ETAF) Platform, a new global climate finance initiative.
The facility aims to finance 1.5 gigawatts (GW) of new renewable energy power in developing countries by 2030.
The ETAF platform will source projects on an ongoing basis, supplemented by calls for proposals aligned with the Paris Agreement and SDG milestones.
Investment-ready projects identified under IRENA’s existing Climate Investment Platform will also represent a notable pipeline.
The UAE already committed $400 million in funding provided by the Abu Dhabi Fund for Development (ADFD) toward the platform’s goal of securing a minimum of $1 billion for the Platform, thereby becoming its first strategic partner.
A statement from IRENA indicated that the formal launch took place on the sidelines of the COP26 United Nations Climate Summit in Glasgow.
The event was also attended by the UAE Minister of Foreign Affairs and International Cooperation, Abdullah bin Zayed al Nahyan, as well as the Prime Minister of Antigua and Barbuda, Gaston Browne; President of the Maldives, Ibrahim Mohamed Solih; President of Togo, Faure Gnassingbé; and UAE Climate Envoy, Dr. Sultan Al Jaber.
Speaking, Al Nahyan said: “The new ETAF Platform reinforces our long-standing commitment to support positive climate action for economic growth in developing and vulnerable countries. As one of the countries that have signed the UN Framework Convention on Climate Change, the UAE fundamentally believes we must work together globally to address climate change.”
He expressed the UAE’s pride “in pushing forward a responsible, sustainability-led agenda, and in partnering with other nations to enable the significant benefits of renewable energy.”
On his part, Al Jaber, who is also the UAE Minister of Industry and Advanced Technology, said the Emirates: “views development aid and climate action as powerful catalysts for economic growth, both domestically and internationally. Today’s announcement will help to advance the economies of partner countries by providing reliable, low-cost renewable energy for businesses, industry, and homes.”
According to him, the climate fund will also “deliver immediate economic benefits in the process,” while combining “partnership, policy, and finance to create tangible progress.”
“It is this focus on practical results that has motivated the UAE to offer to host COP 28 in 2023,” he added.
Today’s announcement will help to advance the economies of partner countries by providing reliable, low-cost renewable energy for businesses, industry, and homes.
Through co-financing, ETAF will aim to mobilise an additional $2 billion in energy transition investments, targeting a total deployment of 1.5 GW of clean renewable energy generation and storage by 2030.
Under the terms, ETAF will be managed by IRENA from its Abu Dhabi headquarters, capitalising on the UAE’s climate finance market and renewable energy innovation infrastructure. The new accelerator platform will help mitigate investment risks and finance renewable energy projects in developing countries that may otherwise struggle to secure sufficient capital.
Also commenting, the Director-General, IRENA, Francesco La Camera, said: “We have reached a defining moment in our generation’s efforts to put our economies and our environment on a path to stability, resilience and shared prosperity. The energy transformation is the most attractive and effective tool we have to achieve that.”
He added that this new investment platform reflects the UAE’s commitment to shaping a sustainable future, and IRENA’s efforts to serve its over 180 member countries as an indispensable energy transformation partner.
He therefore called on multilateral development banks, international financial institutions, governments, and private sector actors to join ETAF in bolstering sustainable development efforts.
Through this new platform, we seek to bring together finance and development partners from around the world under a shared vision to combat climate change.
The new UAE-IRENA ETAF partnership builds on the long-term collaboration between IRENA and ADFD, which includes seven cycles of the $350 million IRENA-ADFD Project Facility. Between 2013 and 2020, the facility financed 26 projects in Asia, Africa, and the Americas, notably including Small Island Developing States.
In total to date, ADFD has worked with a number of clean energy partners and governments in 65 countries to support the development of 90 renewable energy projects that have the capacity to generate more than 9,000 megawatts of electricity. With the new ETAF contribution, ADFD’s total financing for renewable energy projects now stands at $1.8 billion.
Reiterating the success of the partnership, the Director-General, ADFD, Mohammed Saif Al Suwaidi, said the projects delivered have significant environmental, economic and social impact that is transformational for countries and their people.
“Through this new platform, we seek to bring together finance and development partners from around the world under a shared vision to combat climate change,” he added.