Emirati Fund will invest billions in American companies for climate projects
An Emirati financial firm plans to invest at least $30 billion in a new climate fund in partnership with some of the biggest names in North American finance, according to three people familiar with the plans.
The move comes as the United Arab Emirates, this year hosting the annual United Nations climate talks that started Thursday in Dubai, is under pressure to prove its commitment to tackling global warming. the earth, despite the fact that their economy is based on oil production.
Lunate Capital, a new financial firm overseen by Abu Dhabi’s royal family, was launched several months ago with at least $50 billion in assets.
On Friday, Lunate is expected to announce that it will set up the new climate fund with a handful of leading asset managers, including TPG, BlackRock and Brookfield Asset Management, the three people said.
Lunate and BlackRock did not immediately respond to requests for comment. TPG and Brookfield declined to comment.
It was not yet clear what type of projects or companies the funds would invest in. But at least 20 percent of the funds would go to projects in the developing world, where it is especially difficult to finance clean energy projects because interest rates are high. high and lenders shy away from what they consider risky investments.
Although the UAE is one of the largest oil producers in the world, the country is also investing heavily in renewable energy. The head of the UAE’s state oil company, Sultan al Jaber, is also chairman of the United Nations climate conference known as COP28.
Lunate is affiliated with Chimera Investment, part of the sprawling business empire linked to Abu Dhabi’s ruling family. It is overseen by Sheikh Tahnoon bin Zayed Al Nahyan, a brother of the leader of the United Arab Emirates, Mohammed bin Zayed Al Nahyan.
While the $30 billion is a significant amount, it represents only a fraction of the capital experts say is needed to help countries slow climate change and adapt to a rapidly warming world.
The amount of money needed to move the world away from fossil fuels and build a clean economy is staggering: about $3.8 trillion per year over the next few years alone. according to BCG, and many trillions more after that. Currently, only a fraction of that need is being met.
But with each passing month, more asset managers around the world are pouring money into investments aimed at reducing the Earth’s emissions from the burning of oil, gas and coal.
Just last year, TPG Raised $7.3 billion for a climate fundBlackRock raised more than $4 billion for a climate-focused infrastructure fund, and Brookfield raised a $15 billion climate fund.