Decarbonizing the global economy will require trillions of dollars in investment, including in emerging economies and developing countries. But major financiers have been slow to pony up big dollars for projects in the Global South, fearing financial risks that range from volatile currencies to lack of policy certainty.
Altérra, with Majid Al Suwaidi as CEO, is charting a path to change that. The fund, founded at COP28 in Dubai last year with an initial commitment of $30 billion from the United Arab Emirates, is designed to become what he has called “the go-to fund for the climate transition.” Since the announcement, Altérra has secured deals to invest the money with a range of prominent money managers focused on green strategies, including Brookfield and BlackRock.
Crucially, though, the fund sets aside $5 billion for projects in the Global South. That money will not only be used to invest in promising deals but also to serve as capital that attracts other investors by taking on more of an investment’s risk. “Transforming the global economy towards a net-zero and climate-resilient pathway will require a transformation of the climate finance landscape,” Al Suwaidi said in a statement in February. “Altérra will play a key role in that transformation.”
Around the world, climate finance leaders are watching closely. Altérra’s success could clear the path for a wave of private investment in the Global South.