Green finance bonanza at COP: Day 5 of COP28 concluded with a smattering of climate finance updates, with USD bns pledged in the financing towards emerging markets and a just energy transition.

UAE banking sector to mobilize AED 1 tn in climate finance by 2030: UAE banking groups have committed to mobilizing AED 1 tn in green funding by the end of the decade, Wam reports. The AED 1 tn (c. USD 270 bn) climate financing pledge channeled by the country’s National Banks Federation (NBF) aims to help meet the UAE’s 2050 net-zero target. The NBF is made up of 56 UAE-based lenders.

Apicorp ups its 2023-2028 decarbonization investment target to USD 1 bn: The Arab Energy Fund — which earlier this week rebranded from Arab Petroleum Investments Corporation (Apicorp) — plans to invest USD 1 bn over the next five years in the green tech sector to support MENA’s decarbonization efforts, according to a statement. The company has allocated 18% of its USD 4.5 bn loan portfolio toward ESG projects.

Why is this important? The company’s planned investment, along with its rebrand, reflects a corporate strategy aimed at positioning itself as a regional player in the energy transition sector, the statement notes. Back in 2021, the company raised USD 750 mn from its maiden green bond issuances. Later that year, the company reopened those bonds for subscription, raising another USD 250 mn. The company has already channeled USD 610 mn of the proceeds toward 11 regional projects.

France + Japan back AfDB’s SDR proposal: France and Japan announced during the roundtable event on leveraging Special Drawing Rights (SDRs) (watchtime, 13:28, 17:50) that they will support the African Development Bank’s breakthrough facility to leverage SDRs for climate and development. The African Development Bank and the Inter-American Development Bank developed a proposal to channel SDRs to multilateral development banks which SDR-rich countries were expected to support at COP28.

AND- Debt clauses garner big support: TheUK, France, the World Bank, AfDB, EBRD, and the IDB have announced they will expand the use of climate-resilient debt clauses in their lending that pause debt when countries are hit by natural disasters, according to a statement. The UK also announced the first climate-resilient debt clauses in Africa with Senegal. Seventy-three countries have also called for the adoption of the debt clauses.

Climate funds are on the hunt for funds: Danish investment firm Copenhagen InfrastructurePartners is looking to secure USD 3 bn for its new Growth Markets Fund II to establish renewable energy projects in emerging and middle-income countries, the head of the fund told Reuters. The fund will focus on wind and solar power and investments in battery storage and projects that turn electricity into carbon-neutral synthetic fuels. As most climate-focused funds target reliable returns in developed countries, the Growth Markets Fund will target investment returns “in the teens” to offer affordable power in developing countries. Emerging and middle-income countries will need USD 2.8 tn by 2030 to meet cleaner energy goals, out of which only USD 550 mn was raised this year.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

  • Green bonds on the horizon for Kenya: The Kenyan government is mulling sovereign green bond issuances, President William Ruto said in an interview on the sidelines of COP28. Ruto also said that Kenya — which is planting 15 bn trees and restoring 10k wetlands — is looking at issuing debt-for-nature swaps. (Bloomberg)
  • Italy pledges mns to loss and damage fund: Italy is committing USD 100 mn to the Loss and Damage Fund, which reached a total of USD 725 mn in the first four days of COP28. (Statement)
  • Asian Development Bank to extend USD 10 bn to the Philippines: The Asian Development Bank (ADB) said it will earmark USD 10 bn in climate financing between 2024 and 2029 to the Philippines. The multilateral lender’s package will be channeled toward carbon market development, green mobility, renewables, food security, and climate adaptation projects. (Statement)
  • Abu Dhabi will host the Global Climate Finance Centre: Abu Dhabi will host a think tank tasked with developing financial frameworks for investing in the green energy sector. The independent research organization — named Global Climate Finance Centre — is co-founded by the World Bank, HSBC, and asset managers BlackRock and Ninety One. (Reuters)
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