The United Arab Emirates and the International Renewable Energy Agency (IRENA) yesterday announced the Energy Transition Accelerator Financing (ETAF) platform, a new global climate finance platform to accelerate the transition to renewable energy in developing countries.
The UAE 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 in total funding.
The formal launch of the global finance platform took place on the sidelines of the COP26 United Nations Climate Summit in Glasgow. UAE Minister of Foreign Affairs and International Cooperation, Sheikh Abdullah bin Zayed al Nahyan was in attendance together with 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.
UAE Special Envoy for Climate and Minister of Industry and Advanced Technology, Dr Al Jaber said: “The UAE 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. We are proud of this significant new contribution by the Abu Dhabi Fund for Development to accelerate climate action and deliver immediate economic benefits in the process. This is the kind of initiative that combines partnership, policy and finance to create tangible progress and it is this focus on practical results that has motivated the UAE to offer to host COP28 in 2023.”
Through co-financing, ETAF will aim to mobilise an additional $2 billion in energy transition investments, targeting a total deployment of 1.5GW of clean renewable energy generation and storage by 2030. 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.
Director-General of 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. 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. We encourage multilateral development banks, international financial institutions, governments, and private sector actors to join us in bolstering sustainable development efforts.”
The new UAE-IRENA partnership to establish the ETAF global finance platform 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.
To date, the 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 9,000MW of electricity. With the new ETAF contribution, the ADFD’s total financing for renewable energy projects now stands at $1.8 billion.
Director-General of the ADFD, Mohammed Saif Al Suwaidi said: “IRENA and ADFD have an excellent track record working together on the development of major renewable energy projects in developing markets. These projects 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.”
“Given the essential role that renewable energy projects play in achieving sustainable development for developing countries, ADFD has committed to allocating $400 million until 2030 to enable accelerated deployment. These projects will have a great impact on local communities, helping beneficiary countries to achieve greater economic and social development,” added Al Suwaidi.
The ETAF platform will source projects on an ongoing basis, supplemented by calls for proposals aligned with Paris Agreement and SDG milestones. Investment-ready projects identified under IRENA’s existing Climate Investment Platform will also represent a notable pipeline.