The Arab Coordination Group (ACG) committed on Tuesday to set aside $10 billion in funding until 2030 to support energy transition efforts in the developing world.

The strategic alliance of regional and international development institutions announced the allocation at COP28 on Tuesday, according to a statement.

The funding further aligns with the group’s earlier pledge of $24 billion and is meant to drive a comprehensive and affordable transition to renewable energy in target economies.

The ACG comprises various development funds, including the Abu Dhabi Fund for Development, OPEC Fund for International Development, Arab Bank for Economic Development in Africa, Qatar Fund for Development, Saudi Fund for Development and Kuwait Fund for Arab Economic Development, among others. It seeks to provide coordinated response to development finance.

The latest funding is an integral part of the group’s strategic plan to speed up the shift towards clean energy sources worldwide.

According to the International Energy Agency (IEA), the developing countries, as well as emerging economies, account for two-thirds of the world’s population but only get one-fifth of investment in clean energy. Annual energy investments in developing and emerging markets have also dropped by around 20% since 2016.

Strategic plan

As part of the ACG’s plan, financial resources will be mobilised by increasing the use of green bonds, blended finance and risk mitigation tools.

It will work towards enhancing climate change resilience in key sectors, including food, transport, water and urban systems.

Last year, the group allocated around $15.7 billion to nearly 500 financing operations across more than 80 countries to address climate change and food insecurity.

At the COP27 conference in Egypt, ACG had committed $24 billion of climate change financing by 2030.

(Writing by Cleofe Maceda; editing by Seban Scaria)