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UAE backs Africa’s Clean Energy Initiatives by Commiting $4.5 Billion to the sector

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Africa’s clean energy prospects received a significant boost as the United Arab Emirates (UAE) unveiled a substantial investment of $4.5 billion to accelerate initiatives in the sector across the continent. 

This momentous commitment was announced by COP28 President-Designate Sultan Al Jaber during the Africa Climate Summit, presently underway in Nairobi.

The UAE’s dedication to advancing global climate action finds expression through its ambitious climate initiative, backed by prominent UAE entities including Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, and AMEA Power, a leading Dubai-based renewable energy firm. 

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These organizations will collectively finance the endeavour, as per the COP28 Presidency’s announcement.

Here’s a breakdown of the commitment:

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  • The Abu Dhabi Fund for Development will furnish $1 billion in financial assistance.
  • Etihad Credit Insurance will offer $500 million in credit insurance to mitigate risk and facilitate private capital involvement.
  • Masdar commits to $2 billion in equity and aims to mobilize an additional $8 billion in project finance, to deliver 10 gigawatts of clean energy capacity in Africa by 2030.
  • AMEA Power will contribute to the funding of 5 gigawatts of renewable energy capacity on the continent by 2030, mobilizing $5 billion, comprising $1 billion in equity investments and $4 billion from project finance.

Although Africa is responsible for only approximately 4 per cent of global greenhouse gas emissions, the continent disproportionately suffers from the consequences of climate change. 

Escalating temperatures, unpredictable rainfall patterns, and extreme weather events are adversely affecting African nations, posing substantial challenges to agriculture, infrastructure, and overall development. 

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To tackle these issues, significant investments in clean energy and climate resilience are imperative.

The allocated funds will be directed toward clean energy ventures and climate adaptation initiatives, assisting African countries in strengthening their infrastructure, refining regulatory frameworks, and establishing grid systems to support the transition to renewable energy sources.

To ensure the effective utilization of these funds, the African Development Bank’s Africa50 investment platform will collaborate as a strategic partner. 

This partnership will identify and advance suitable projects aligned with Africa’s sustainable development goals and climate action strategies.

The UAE’s commitment to investing in Africa’s clean energy future is especially timely. 

According to the Global Center on Adaptation, Africa may require nearly ten times its current climate adaptation funding, amounting to $100 billion annually. 

This funding gap underscores the urgency of international support for African nations as they strive to build climate-resilient economies.

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Diana Mutheu
Diana Mutheu
Diana Mutheu is a Tech enthusiast, happy to delve deeper into the African tech space covering Social Media, AI, Startups, Telcos, Cryptocurrency, Big Data, Women in Tech and all matters Tech. Write to me @[email protected]

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