The UAE has launched a new $30 billion climate-focused investment vehicle called ALTÉRRA, which will be the world’s largest private investment fund for climate change action.

ALTÉRRA, set up by Abu Dhabi-based investment fund Lunate, will mobilise a further $250 billion globally by 2030.

UAE President Sheikh Mohammed Bin Zayed Al Nahyan pledged the fund for climate financing during COP28.

Dr. Sultan Al Jaber, COP28 President, described the launch of the vehicle as a defining moment in the creation of a new era of international climate finance.

Dr. Al Jaber, who will chair ALTÉRRA’s Board, said: “ALTÉRRA's scale and structure will create a multiplier effect in climate focused investment, making it a vehicle like no other."

The fund has an two-part structure--ALTÉRRA acceleration and ALTÉRRA transformation--to spur new ideas, incentivise policy and regulatory frameworks, and identify solutions to rapidly deploy capital, according to a COP28 statement.

ALTÉRRA acceleration, with a $25 billion component, will steer institutional capital towards climate investments.

ALTÉRRA transformation, with $5 billion, will provide risk mitigation capital to incentivise investment flows into the Global South, directly addressing the challenges that currently limit climate investment and access to affordable capital.

(Writing by Brinda Darasha; editing by Seban Scaria)