Climate fund Alterra to mobilise $250bln by 2030, says CEO

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Alterra, a $30 billion climate investment fund launched at COP28, aims to become the “fund of choice” for the climate transition, with its structure, scale and scope and focus on innovation and partnerships enabling it to steer private markets towards climate investments and focus on transforming emerging markets and developing economies, its chief executive officer said today (February 14) in a special session at the World Governments Summit (WGS) in Dubai.

The UAE has committed $30 billion to Alterra, thus making it the world’s largest private investment vehicle for climate change action, and the fund aims to mobilize $250 billion globally by 2030, Ambassador Majid Al Suwaidi, COP28 Director-General and Alterra CEO, said in a panel session, reported Wam.

The panel session included Dr. Mahmoud Mohieldin, Executive Director at the International Monetary Fund; Rajiv Dhar, Board Member of the National Infrastructure Investment Fund and Head of US India Green Fund; Arvind Ramamurthy, Chief Market Development Officer at Abu Dhabi Global Market (ADGM); Samir Suleymanov, Director of Finance at COP28 and was moderated by Mercedes Monserrate, CEO of the Global Climate Finance Center (GCFC).

Ambassador Al Suwaidi said: "The vision for Alterra was borne out of the COP28 Presidency’s Action Agenda focus on how we can make climate finance more available, accessible and affordable for all, and remove barriers impeding investment – especially into the Global South. Alterra is a key element in the COP28 Presidential Action Plan to help drive climate investment to the solutions and markets where it is most needed."

Alterra has been designed to be as innovative as possible to maximize its impact and unlock capital flows to tackle challenges head-on, he added.

Ramamurthy said: "In its commitment to catalyze climate finance amidst global transitions and bolster the UAE’s net-zero targets, ADGM is proud to be a home for Alterra, a groundbreaking initiative with its climate transition funds, and the GCFC, a private-sector-focused think tank and research hub."

"As we navigate challenges to making climate finance universally accessible, ensuring its availability, accessibility, and affordability—the value proposition of ADGM and its sustainable finance framework will be instrumental in strengthening a climate-resilient economy. Collaboratively, they pave the path toward establishing the UAE as the leading hub for comprehensive climate finance initiatives," he added.

Dhar pointed out that there was a need for blended finance for meeting the climate goals of Global South.

"Alterra is a pathbreaking initiative of the UAE and has been developing strategies for making a significant impact in Emerging and Developing Economies," he stated.

Alterra features an innovative two-part structure, designed to both bridge the gap in investment into the solutions needed to keep the world on the 1.5C pathway, drive investment into the Global South, and create new investment opportunities and strategies for emerging markets and developing economies (EMDEs).

The first arm, Alterra Acceleration, with $25 billion, is designed to steer capital towards investments at scale to accelerate the transition to a net-zero and climate-resilient economy. The second arm, the $5 billion Alterra Trasnformation, is designed to provide risk mitigation capital to further incentivize investment flows into the Global South, said the Wam report.

Alterra said it was making good progress on the commitments made at COP28, where in collaboration with BlackRock, Brookfield and TPG as inaugural launch partners, it committed $6.5 billion to climate-dedicated funds for global investments, including the Global South, the ambassador said.

Alterra is focused on the success of the Emerging Market transition funds launched with Brookfield and TPG that are purpose-built to attract institutional capital into markets that have to date been chronically underinvested.