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UAE to launch $30bn investment fund at COP28

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The United Arab Emirates is preparing to launch a $30bn climate-related investment fund with BlackRock, TPG and Brookfield, according to people familiar with the matter.

The launch comes as the UAE attempts to bolster its credentials as host of COP28 on the first days of the UN summit.

Lunate Capital, a new Abu Dhabi-based asset manager set up with $50bn in assets, will oversee the fund with at least $5bn earmarked for investment in Global South countries, three people involved in discussions said.

The UAE is drawing on vast resources amassed as one of the world’s biggest oil and gas producers. The nation sits on assets worth $2.5tn across its sovereign wealth fund, pension funds and central bank, according to data provider Global SWF. 

COP28 president Sultan al-Jaber has repeatedly said climate finance would be a key focus for the summit, which kicked off on Thursday in Dubai. Tens of thousands of delegates and up to 180 heads of state or government are expected to attend the event in Expo City over the next two weeks. 

The Financial Times reported this week that the UAE was putting together a multibillion-dollar investment pot. The country has been linked to almost $200bn in investments this year, largely in green energy, according to FT analysis. 

The UAE has come under scrutiny since being chosen as the COP28 host a year ago over questions on whether one of the world’s biggest oil and gas producers should oversee global climate negotiations. 

One leading figure in climate finance called the investment fund a “serious amount” aimed at positioning the UAE as a global centre for climate finance.

Countries, especially in the developing world, are struggling to find the cash to shift their energy systems and economies from fossil fuels to green sources of power. There is also a shortfall in cash to adapt the world’s economies for hotter temperatures. 

UN research in 2021 found that $125tn of climate investment would be needed by 2050 if the world was to slash its emissions and meet its Paris agreement goals. The International Energy Agency has said $4.5tn will be needed each year for clean energy alone by the early 2030s, up from $1.8tn now.

In recent years there has been a big focus on reforming the IMF, World Bank and other multilateral development banks to divert more money to climate change, but there are also growing calls for the private sector to work with public finance to invest in green projects.

Lunate was launched earlier this year under the patronage of UAE national security adviser Sheikh Tahnoon bin Zayed al-Nahyan, a brother of the Gulf state’s ruler Sheikh Mohammed bin Zayed al-Nahyan. Lunate is owned by Chimera Investment and its senior management.

In September, Lunate said Khalifa Al Suwaidi, head of Abu Dhabi Growth Fund, would be one of three managing partners, along with Murtaza Hussain, chief investment officer at Abu Dhabi wealth fund ADQ, and private investment company Chimera chief executive Seif Fikry.

Brookfield, BlackRock and TPG declined to comment. COP28 representatives also declined to comment.

Additional reporting by Kenza Bryan and Antoine Gara

Climate Capital

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