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Alterra, the world’s largest private climate investment fund of $30 billion launched by the United Arab Emirates (UAE) last year, sees a lack of investment opportunities in the energy transition and has only spent a small part of its money, the fund’s chief executive Majid Al Suwaidi told Bloomberg.
There aren’t attractive investment deals in the clean energy sector right now, especially in emerging and developing markets, the executive told Bloomberg, declining to go into details how much the fund has spent over the past year.
The UAE, a major oil producer in the Middle East, launched Alterra at the COP28 summit in Dubai last year. The fund’s goals are to “drive forward international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South.”
With $30 billion committed, Alterra became the world’s largest private investment vehicle for climate change action. The fund has stated its goal to mobilize as much as $250 billion globally by 2030 and help bridge the gap in investment into the solutions needed to keep the world on the 1.5 degrees Celsius pathway, drive investment into the Global South, and create new investment opportunities and strategies for emerging markets and developing economies (EMDEs).
In collaboration with BlackRock, Brookfield, and TPG as inaugural launch partners, Alterra has so far committed $6.5 billion to climate-dedicated funds for global investments.
However, the actual money spent on funds is significantly lower than this initial commitment, Alterra’s CEO Majid Al Suwaidi told Bloomberg in Azerbaijan, which is currently hosting the COP29 climate summit.
The project financing of energy transition projects is often complicated because of the mix of public and private investments needed.
According to Alterra’s Al Suwaidi, it is difficult to mobilize financing from the public sector, which is often experiencing financial troubles, while private investors and banks are averse to taking a lot of risk.
