The COP28 Presidency has announced plans by United Arab Emirates (UAE) to inject a staggering $4.5 billion into unlocking Africa’s vast clean energy potential. This commitment was unveiled during a keynote address by COP28 President-Designate H.E. Dr. Sultan Al Jaber at the inaugural African Climate Summit held in Nairobi, Kenya.
Notable contributors include the Abu Dhabi Fund for Development (ADFD), Etihad Credit Insurance (ECI), Masdar, and AMEA Power. Africa50, an investment platform established by African governments and the African Development Bank (AfDB), has also joined forces with the UAE finance initiative.
To reduce barriers to investment, Dr. Sultan Al Jaber outlined key action points that require concerted efforts from African leaders and the international community. These include restoring the financial sustainability of local utilities, modernizing essential energy infrastructure, streamlining development processes, eliminating bureaucratic red tape, and facilitating capital flows. Additionally, ensuring access to adequate and affordable risk mitigation measures was highlighted as a critical step.
In sub-Saharan Africa, a staggering 600 million people live without access to electricity and investment in African renewables currently represents just 2 percent of the global total, significantly short of the $60 billion per year required by the continent by 2030.
This initiative falls under the umbrella of Etihad 7, a development platform by the UAE that aims to provide clean electricity to 100 million people across Africa by 2035.
The Abu Dhabi Fund for Development (ADFD) and Etihad Credit Insurance (ECI) are leading the charge by funding the initial investments to catalyze private sector involvement. ADFD is committing $1 billion to address basic infrastructure needs, provide innovative finance solutions, and enhance private investment mobilization. ECI, on the other hand, is contributing $500 million in credit insurance to mitigate risks and unlock private capital for sustainable development.
Masdar, a global clean energy powerhouse operating in 22 African countries, is pledging an additional $2 billion in equity as part of the initiative. Masdar intends to mobilize an extra $8 billion in project finance through its Infinity Power platform, with a target of delivering 10 gigawatts of clean energy capacity in Africa by 2030.
AMEA Power is also stepping up with a commitment to generate 5 gigawatts of renewable energy capacity in Africa by 2030, mobilizing $5 billion, of which $1 billion will come from equity and $4 billion from project finance.