COP26: IRENA and the UAE unveil $1bn fund for renewable energy

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The Energy Transition Accelerator Financing (ETAF) Platform launched by the International Renewable Energy Agency (IRENA) and the United Arab Emirates (UAE) at the COP26 Summit aims to unlock a minimum of $1 billion in investments to support the deployment of renewables in developing countries.

The UAE government has committed to providing $400 million through the Abu Dhabi Fund for Development (ADFD) towards ETAF.

ETAF aims to raise up to $2 billion in funding to help developing economies deploy 1.5GW of renewable energy and storage capacity by 2030 and in the process help them to speed the energy transition to mitigate climate change.

The launch of the facility comes at a time developing countries are lagging behind ‘first-world countries’ in renewables deployment due to a lack of adequate funding, yet they are the ones mainly affected by climate change.

HE Dr Sultan Al Jaber, UAE Special Envoy for Climate and Minister of Industry and Advanced Technology, said renewables will enable developing countries to provide consumers with affordable and reliable electricity, which is vital to spurring economic growth.

The majority of developing countries today rely on coal and fossil fuels including diesel and gas, which are not climate-friendly and costly. As a result, many countries experience power outages due to the high costs associated with fossil fuels.

South Africa’s Eskom and Zimbabwe’s ZESA are good examples of utilities struggling to maintain secure energy supply using coal and also due to their lack of investments to expand renewables capacity such as hydropower and solar. With China announcing that it will stop financing coal projects globally, the availability of funds for clean energy programmes is vital for developing economies such as Zimbabwe right now, one would argue.

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Renewables would also ensure energy independence by reducing the importation of coal, diesel and gas for energy generation, according to a statement.

Jaber added: “This is the kind of initiative that combines partnership, policy and finance to create tangible progress, and it is this focus on practical results that has motivated the UAE to offer to host COP 28 in 2023.”

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Francesco La Camera, the Director-General of IRENA, said: “We have reached a defining moment in our generation’s efforts to put our economies and our environment on a path to stability, resilience and shared prosperity. The energy transformation is the most attractive and effective tool we have to achieve that.

“This new investment platform reflects the UAE’s commitment to shaping a sustainable future, and IRENA’s efforts to serve its over 180 member countries as an indispensable energy transformation partner. We encourage multilateral development banks, international financial institutions, governments, and private sector actors to join us in bolstering sustainable development efforts.”

ETAF launched on the 3rd of November, a day dedicated for financial institutions and governments to pledge funds dedicated to climate action at COP26.

The European Commission, the European Investment Bank (EIB), and Bill Gates, through the EU-Catalyst partnership, pledged to invest €820 million ($1 billion) to support the development and deployment of climate-friendly technologies including green hydrogen, renewable energy, energy storage and carbon capture between 2022 and 2026.

The EIB also strengthened its partnership with the Asian Development Bank to support the funding of renewable energy and energy efficiency projects in Asia and the Pacific.