Tuesday the New York Times reported that while hosting the global climate summit, the United Arab Emirates also hoped to lobby for oil and gas deals around the world.
But Friday the United Arab Emirates announced that they’d also started a $30 billion climate fund, reports Reuters, and that fund “aims to attract $250 billion of investment by the end of the decade.”
The New York Times notes the fund started just months ago, and “at least 20 percent of the funds, would be earmarked for projects in the developing world, where it is especially difficult to finance clean energy projects because interest rates are high and lenders shy away from what they perceive as risky investments.”
The Washington Post notes that “It immediately becomes one of the world’s largest climate-focused investment funds.”
“This is a big deal,” said Mona Dajani, global head of renewables, energy and infrastructure at the law firm Shearman and Sterling. “We have seen other programs previously, but not at this level. They were too scattered, too small, not aligned to the broader financial sector.”
The lack of cash feeds into other challenges that can make it impossible to scale up clean energy in some countries. Without a steady pipeline of projects, there are no established supply chains, and nations find themselves locked out of markets for key components that are in high demand elsewhere, such as solar cells and critical minerals used to make giant batteries that store renewable power. The Global South will need an immense amount of such battery storage by the end of the decade, according to the Rockefeller Foundation, enough to store about as much power as is produced by 90 large nuclear plants. The storage is used to bottle wind and solar power and distribute it back into grids after dark and when the wind dies down.
The Post also reports that “the money to fund the projects will come largely from oil revenue.”
While the UAE framed its initiative as a call to global action, it is at least partly geared toward generating returns. It is one of several forays the UAE is making into clean-energy finance as it seeks to diversify its economy amid predictions the demand for oil will slump in coming years… The new initiative puts a spotlight on the UAE’s evolving role in the fight against climate change. The country is at once one of the world’s biggest contributors to warming, pumping massive amounts of oil into the global economy, while also using its fossil fuel wealth to put itself on the vanguard of energy innovation.
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