DUBAI - COP28 is witnessing a strong presence of African nations, who are actively engaged in discussions and seeking effective solutions to confront the repercussions of climate change and reduce carbon emissions.
Though the African continent's share of global carbon emissions is relatively low, accounting for only 3.5% of greenhouse gas emissions worldwide, African countries are disproportionately affected by the consequences of climate change. This highlights the need to prioritise discussions at COP28 on how to provide the necessary financing to help African nations adapt to the increasing impacts of climate change.
Strengthening policy and regulatory frameworks is crucial to attract long-term investments that will accelerate the development and implementation of clean and renewable energy projects across Africa.
COP28 discussions will also emphasise the urgent need to double adaptation financing and establish mechanisms for financing losses and damages. This is essential to safeguard individuals and communities that are most vulnerable to the repercussions of climate change. Additionally, expanding the scope of development of international financing institutions is necessary to ensure that mitigation efforts receive the necessary funding, alongside providing adaptation financing for developing countries.
Expanding access to clean energy opportunities would significantly advance social and economic development in Africa. Currently, Africa receives only about 2% of global investments in renewable energy, and less than a quarter of the continent's annual needs, which amount to $60 billion by 2030.
The African continent is highly vulnerable to the effects of climate change, yet it receives only a small percentage of the annual financing it requires to address these challenges. Establishing a new financing structure that aligns with the specific needs of the African continent is essential to reduce the burden on African economies.
In a joint declaration at the conclusion of the first African Climate Summit in Nairobi, Kenya, African leaders proposed a global system for carbon taxes. The declaration urged major polluting countries to allocate more resources to assist developing nations.
The declaration also called for increasing Africa's renewable energy production capacity from 56 gigawatts in 2022 to 300 gigawatts by 2030. This is a critical step towards addressing energy shortages and enhancing global supplies of clean and profitable energy.
The African continent is rich in natural potential and resources that could position it as a global leader in clean energy, enabling it to mitigate the effects of climate change through the expansion of alternative energy sources.
Many African countries are adopting specific strategies related to renewable energy, aiming to develop capabilities in various relevant sectors. Promising investments in environmental projects are being made to enhance Africa's capabilities in the energy transition, providing a lifeline for the African continent to mitigate the consequences of climate change.
Demonstrating the UAE's commitment to working and cooperating with partners around the world to promote sustainable economic and social growth and progress, and to protect the environment, especially in sisterly and friendly countries in Africa, an AED16.5 billion ($4.5 billion) UAE funding initiative was announced last September during the African Climate Summit in Nairobi. This initiative aims to stimulate and enable African countries to strengthen their clean energy capabilities.
This initiative is supported by government, private, and development institutions of the UAE, including the Abu Dhabi Fund for Development (ADFD), the Etihad Credit Insurance (ECI), the Abu Dhabi Future Energy Company “Masdar”, and the AMEA Power Company.
This initiative falls under the umbrella of Etihad 7, a development programme launched by the UAE during Abu Dhabi Sustainability Week in 2022 with the support of the Ministry of Foreign Affairs. The programme aims to provide 100 million individuals across the African continent with clean electricity by 2035.
The UAE finance initiative will collaborate with “Africa50”, an investment platform established by African governments and the African Development Bank. This collaboration aims to address basic infrastructure challenges on the continent by identifying projects and linking the initiative with local implementing partners.
The initiative aligns with the ongoing efforts of the COP28 Presidency to call for tripling global renewable energy production capacity by 2030 and providing more accessible and affordable climate finance.
The initiative begins with the ADFD and ECI financing the initial investment, which aims to stimulate private sector involvement. The ADFD is providing financial assistance worth $1 billion to meet basic infrastructure needs, provide innovative financing solutions, and mobilise and stimulate private investments. ECI is also providing credit insurance worth $500 million to reduce risks and attract private capital.
Masdar, a global leader in the field of clean energy, is committed to expanding access to renewable energy solutions in 22 African countries. As part of the new initiative, the company is investing an additional $2 billion and aims to mobilise an additional $8 billion to finance renewable energy projects across the continent.
Through its platform, "Infiniti Power," Masdar aims to provide 10 gigawatts of clean energy in Africa by 2030. Additionally, Amea Power is committed to generating 5 gigawatts of renewable energy on the continent by 2030. Amea Power plans to raise and mobilize $5 billion in funding, including $1 billion in equity capital and $4 billion in project financing.
The initiative also seeks to pave the way for development banks, governments and multilateral humanitarian institutions to raise and catalyse additional investments in the private sector.