Saudi firm harnesses power from the sun

Private solar firms such as Desert Technologies are helping to establish renewable energy in countries worldwide. (Supplied)
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Updated 14 March 2021
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Saudi firm harnesses power from the sun

  • KSA targets 9.5 GW of renewable energy by 2023
  • Kingdom aims to reduce hydrocarbons reliance

DUBAI: In the past decade, the world has witnessed a pressing need for a major transformation from conventional energy sources to renewables starting with planned efforts in limiting the global temperature from rising to 2.0ºC (3.6˚F) for the present century.

A number of producer economies have recognized the need to diversify their energy production while simultaneously seeking to diversify their economies by putting energy transitions at the heart of their development strategies. Saudi Arabia, the world’s largest oil exporter, has, in turn, experienced an emergence of a solar sector as part of its economic diversification plans under the Kingdom’s Vision 2030.

Saudi businessman Khaled Ahmad Sharbatly, the managing partner of Desert Technologies, which specializes in solar energy, offers insight into how the launch of the solar industry in the Kingdom prompted business development and outlines both the opportunities and barriers for the country’s expansion into “yellow gold.”

In addition to his position in Desert Technologies, Sharbatly, 26, has undertaken courses at the UN, Harvard Business School, Harvard Law, and completed a fellowship from the International Monetary Fund that was only given to 20 people around the world. He holds two posts, one in the Chinese-Saudi Business Council and another in the industrial council of the Jeddah Chamber of Commerce, where he is leading the team for the general overview of sustainable manufacturing that is focused on supporting industries that have been affected by coronavirus (COVID-19) pandemic and how they can have a sustainable recovery.

Having spoken at over 15 international conferences, including the Business Twenty (B20) the official business community engagement forum for the Group of Twenty (G20), the World Future Energy Summit (WFES), Intersolar, and others within the span of two years, Sharbatly describes himself as an active sustainability and renewable energy influencer that promotes sustainable development initiatives within personal and professional environments.

While the Kingdom’s Vision 2030 provides for the transformation of Saudi Aramco into a multi-sectoral industrial powerhouse, private solar firms, such as Desert Technologies, have already sprung with growing expectations about the market, carving their position within the industry with projects in 26 countries worth more than $200 million.

Sharbatly said that his decision to dive into the renewable energy industry was prompted by the Vision 2030 goals of revolutionizing environmental sustainability, which ultimately leads to the capitalization of the growing demand for sustainable investments.

“In 2016, when the initial draft of the Saudi Vision 2030 was released, I took a look at that draft and I saw where our country was heading in the next 15 years,” Sharbatly said.

“I saw that sustainability was a huge component of it. Getting out of fossil fuels and into renewable energy is an area of huge strength for the Kingdom because we are the energy suppliers of the world.

“So if we change from fossil fuels to gas, from gas to hydrogen, from hydrogen to solar or from solar to wind, it would be indifferent as we can build the industry, given that we have the supply chain, the logistics and the full infrastructure for that. It is much more attainable than many other industries, and in terms of logistics, we have two of the largest ports in the red sea, almost 70 percent of the world’s trade goes through us.”

Saudi Arabia’s socio-economic development in recent decades has been driven by oil-and-gas revenues. The vast wealth it pumped out was a major contributor to the government’s budget revenues, paying not only for the glistening skyscrapers but also for a government sector that employs a high percentage of Saudis.

With its vast deserts, the Kingdom is now linking its future to another natural resource it has in even greater abundance: sunlight.

The Saudi government has set a target of generating 9.5 gigawatts (GW) of renewable energy by 2023, which will generate enough electricity to power around 40,000 homes.

“Even though we have an impressive natural potential for solar and wind power, and our local energy consumption will increase threefold by 2030, we still lack a competitive renewable energy sector at present. To build up the sector, we have set ourselves an initial target of generating 9.5 gigawatts of renewable energy,” a Saudi cabinet statement said on the Saudi Vision 2030.

Forming part of the GCC, Saudi Arabia lies within the so-called “global sunbelt” and has some of the highest solar irradiances in the world with over 3,000 hours of sunlight annually. Around 60 percent of the region’s surface area has been found to have a particularly high level of suitability for solar PV deployment, according to the International Renewable Energy Agency (IRENA).

“Currently we work through the company’s factory in Jeddah to collect and market solar panels produced in Saudi Arabia for use in multiple facilities such as schools, exhibitions, mosques, factories, warehouses and soon homes all over the Kingdom to reduce the kilowatt price for companies and individuals,” Sharbatly said.

Representing a firm that is taking advantage of its country's most abundant clean-energy source, Sharbatly said Desert Technologies builds the smart infrastructure of the future, powered by the sun.

“Smart infrastructure is a wide array of products and services to be developed, constructed, or manufactured and that is what we do — we manufacture, we develop and we construct,” Sharbatly said. “We manufacture solar panels, we manufacture power plants, invest in power plants by selling electricity and we construct plants.

“Today, we will invest in smart infrastructures such as utility-scale projects or the regular solar panel projects that can be seen on roofs or grounds. Solar plus battery, solar plus diesel, hybrid systems, and also powering vehicles using renewable energy, because we think there is a huge field where we are trying to be sustainable and buy electric vehicles. But we are powering them using conventional electricity, or we buy energy-efficient refrigerators that save money, which defeats the objective,” Sharbatly said.

Smart infrastructure essentially leverages data and digital connectivity to improve certain functions, including sustainable energy management. That aims to help in achieving a lower carbon footprint through the production of more efficient infrastructure and planning.

“We are trying to power all these products that have already taken a step towards sustainability with real sustainable sources of energy. It is solar today, but in the future, it could be something else as we are flexible and technology agnostic,” Sharbatly said.

“Sustainability is Vision 2030 — how can we build a country that is not dependent on one major source of income but have sustainable development across all sectors such as social, governmental, environmental, commercial, for the future,” Sharbatly said.

“The country’s location and climate mean it has plenty of promising sites for solar and even wind farms.”

The abundance of solar resource potential primarily indicated by its strategic location, accompanied by the recent fall in global oil prices and the falling cost of associated technologies, such as photovoltaic (PV) modules are major factors influencing the appeal of solar energy in the country. The costs of installing and operating such technologies have fallen drastically around the world in recent years, which means that even in a country where oil is copious, renewables still beckon as a cheap and clean alternative to traditional fossil fuels.

“Today solar is around 90 percent cheaper than oil and gas,” Sharbatly said.

“The first step onwards to this transition is hybrid solutions. Hybrid solutions are the first gateway to complete renewable energy or a 100-percent clean energy future. Today we have oil, we have power plants, we have diesel generators and we are not going to replace them as the energy demand is increasing, even if it is at a small rate. It is still increasing and we cannot convince people to throw away investments that they have made and bring something else when they have not made the return yet. This is the world view, not just my view. We have to transition into sustainability and into a sustainable grid powered by sustainable energy sources.”

The initial driver behind the Saudi government’s interest in the use of solar power was its intention to diversify its energy mix towards alternative sources, including renewables in order to preserve domestic energy production for export amid rising domestic consumption of oil for power generation.

“Oil, coal, gas, or any other source of energy will never, at least for the next 100 years, be out of the energy mix,” Sharbatly said. “We will use these fossil fuels to create all sorts of products. That's the true value of fossil fuels — to create value and products, instead of burning them to create electricity. We can make electricity in cheaper, cleaner ways.”

The global population is expected to reach 9.7 billion by 2050, which is a 1.9 billion increase from 2020, according to the UN. Concurrently, as urbanization continues, the proportion of the population living in urban areas will increase to around 66 percent by 2050, up from 30 percent in 1950.

Saudi Arabia’s capital Riyadh will at least double in size from its current population of around 7.5 million people by 2030. The country’s population will reach 45 million by 2050, implying a population increase of about 13.5 million from 2015. Meanwhile, the proportion of the urban population will increase at a dramatically higher rate than other countries, to under 90 percent by 2050, according to the UN Department of Economic and Social Affairs.

This high rate of population growth and urbanization has driven a rise in domestic energy and electricity demand. Peak electricity load in Saudi Arabia, for instance, has been rising by 7 percent every year. Electricity consumption has grown from 186.5 Terawatt hour (TWh) in 2008 to 345.05TWh in 2018, according to International Energy Agency (IEA) data. Further increase in such trends inevitably poses significant questions for sustainability and is anticipated to place unparalleled pressures on energy demand and supply.

In line with these trends, Desert Technologies has started working on the expansion of its factory from 100 MW to 200 MW yearly production, which is indicative of the heightened demand for renewables in the region. In 2021, the company plans to increase its presence within the Middle East and signed four projects by February. Two of the projects are in Saudi Arabia, one is in Bahrain and the one in Egypt is set to be completed by 2022.

The firm’s goals for the next five years echo such expansions, with intentions of accumulating projects in the Middle East and Africa. In Asia, Desert Technologies will be doing up to $3.5 billion of work, with a specific focus on the small to medium scale on-grid and off-grid solutions, according to Sharbatly. It also plans on releasing two other companies, one of which is a development company that will be released as a joint venture.

Furthermore, the firm seeks to grow in Southeast Asia and Latin America to further build its track record. Sharbatly mentioned Japan as a particular country of interest.

“They are very advanced in technology and there is an incredible relationship between Saudi Arabia and Japan,” Sharbatly said. “There is a big presence of Japanese companies, bands and investors in Saudi and vice versa. We are amazed by how advanced they are. Also, we like their work ethic, we like their honesty and culture, all of which we think fits with ours.”

Sharbatly then discussed why renewable energy is not being utilized fully in Saudi Arabia, despite the availability of necessary resources and the challenges associated with such an energy transition.

“To localize an industry is not an easy job and Saudi is trying to start where everyone else has finished,” he said.

“It requires a huge investment in infrastructure, training, building facilities because it is pointless to invest in building power plants or to allow companies to come and bid for building power plants when the jobs they are going to be making as a developer or contractor are short-term jobs. The strategic value in localizing an industry is creating manufacturing industries where there are long-term jobs that require highly skilled people and require universities and highly skilled programs to really support the training of these people. Just like we have excelled in oil and gas, we can excel in this.”

Sharbatly said COVID-19 has delayed the process.

“It needs time — time to build state-of-the-art facilities, to sign with suppliers from around the world and localize the industry,” he said. “The government right now is really focused on health and saving the lives of its people, but hopefully in the upcoming year and in 2022 there will be a lot of very good news on new manufacturing facilities, including ours.”

Another reason such a transition requires time is those energy transition pathways that imply an imminent peak and then a steep drop in oil demand would result in sharply reduced revenues for many countries.

This year’s coronavirus-induced decrease in oil demand and the subsequent impact on prices put this challenge in stark relief. It demonstrates not only the effect a rapid transition would have on the world economy, but also provides an admonitory observation of the future if success is not achieved in the diversification efforts of key producer economies.

Pointing out that once electricity is generated, it cannot be stored, except in limited amounts using batteries, but can be sent long distances across the grid, Sharbatly said: “Storage today is quite competitive, especially from unsubsidized energy. In countries like Saudi or the GCC, storage is very difficult because it is more expensive than the energy you get from the government, while in Africa it is much cheaper.”

The storage of excess energy produced still presents a problem due to limited storage capacities and overproduction that can result in losses. Consequently, one of the main objectives of building sustainable smart infrastructure is to enable the adaptation of energy production to actual demand. This entails the achievement of demand-oriented production that can, with proper infrastructure and planning, allow immediate consumption of produced energy.

The development of different sectors of smart infrastructures, such as smart energy and smart transportation would enable the accumulation of real-world data that can be interconnected for use among different services.

Desert Technologies also plays a role in assisting Saudi Arabia in becoming a renewable-energy exporter and supplier through their major operations in developing and emerging markets that use solar PV panels manufacturing in the country.

For example, Desert Technologies was a co-developer for several solar photovoltaic projects in Benban, Egypt, which is one of the world’s largest solar farms. This includes the ARC Project, which has the capacity to generate 65.7 megawatt (MW) of energy, the Winnergy Project, with a 24.9MW generation capacity and the Arinna Project, with a 24.9MW generation capacity. The electricity generated from these plants is sold to the Egyptian Electricity Transmission Company (EETC) under a 25-year power purchase agreement. Cumulatively, Benban’s fields consist of 6 million panels that produce 1.5 gigawatts (gw) of energy, which is enough to power more than one million homes.

While many countries are now exploring ways to stimulate social and economic growth through the development of the renewable energy sector within their own parameters, Desert Technologies has chosen to target less economically developed countries to promote sustainable economic development.

In 2019, there were 771 million people without electricity access, which was a record low. This was enabled through the use of grid electrification as the primary source of energy access gained since 2000, according to data from World Energy Outlook 2018. Despite such progress, the world remains far from achieving SDG targets to ensure universal access to affordable, reliable and modern energy services by 2030. The population without access to electricity in Sub-Saharan Africa remains at 579 million, amounting to 56 percent of the population.

The manufacturing division at Desert Technologies called “DT Labs” invests in research and development to create new and better solutions. The current areas of infrastructure innovation include the development of solar-powered electric vehicle charging stations and solar street lamps that can provide Wi-Fi and phone charging services. The company is also developing mini-grid systems that reuse lithium-ion batteries, from cars or computers, to build economic and efficient mini-grid and off-grid solar systems in Africa.

The challenges associated with electricity provision in developing countries extend beyond the sphere of private investment and involve difficulties associated with infrastructure. The innovative approaches to solving the problem by Desert Technologies demonstrate how international investments in renewable energy can provide key resources and help in the creation of enabling environments through the provision of sustainable, efficient, and equitable electricity in regions critical to the global climate future.

The oil and gas producers in the Middle East and North Africa region are conscious of the potential adverse impacts of climate change and the impact it will have on their economies, given their current dependence on oil and gas revenues. This makes the way in which the increasing energy demand across the region is met highly significant, and the argument for renewables, particularly solar PV, in obtaining a larger role in the energy mix, even more compelling.

Desert Technologies, with its ambitious projects that are already yielding results throughout the region, serves as one example of how the Kingdom can leverage its abundant resources, domestic expertise and competitive advantage in energy production. Linking energy and industrial transformations to optimize new opportunities will simultaneously position Saudi Arabia in the new energy market.


Saudi Arabia launches company to transform Asir into global tourism hub

Updated 14 November 2024
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Saudi Arabia launches company to transform Asir into global tourism hub

RIYADH: Saudi Arabia’s Asir region has launched a new tourism venture through a partnership with the aim of creating a holding company to transform the area into a global tourist destination.

The collaboration between Aseer Investment Co., a subsidiary of the Public Investment Fund, and Rikaz Real Estate, aligns with the goal of transforming Asir into a world-class tourist destination that combines authentic heritage with sustainable development, according to the Saudi Press Agency.

The holding company seeks to contribute to enhancing a tourism environment that enriches guests’ experiences with unique offerings, connecting visitors to local culture and community traditions, SPA reported.

It is also committed to promoting sustainable tourism by protecting the environment, developing local communities, and collaborating with artisans and local businesses to preserve the authenticity of Asir’s heritage.

In October, the Kingdom’s Abha city secured a new investment partnership to boost tourism by developing culturally rich dining and retail experiences. 

PIF firm Aseer Investment Co. signed the deal with Nimr Real Estate and the National Co. for Tourism, or Syahya, to propel the project, the Saudi Press Agency reported. 

This aligns with the objectives of developing Abha, which will offer a range of benefits, including retail stores that reflect the cultural heritage of the Asir region.

The partnership also seeks to be a model for multiple collaborations with private sector investors and create more regional job opportunities.

Investments in the region are expected to create between 14,000 and 18,000 job prospects and contribute to up to 6 percent of the non-oil gross domestic product within 10 years, as outlined by AIC Chief Executive Osama Al-Othman in February.

Saudi Arabia emerged as a leader in tourism growth among G20 nations, experiencing a 73 percent increase in international visitors in the first seven months of 2024 compared to 2019.

According to the UN World Tourism Barometer report in September, the Kingdom welcomed 17.5 million international tourists during this timeframe, showcasing its growing allure as a global travel destination.

This surge is part of the nation’s Vision 2030 initiative, which aims to diversify the economy and reduce dependence on oil revenues.

“Saudi Arabia cements its global leadership and takes the first spot among G20 countries in international tourist arrivals growth, with a 73 percent increase in the first seven months of 2024 compared to the same period in 2019,” stated the Saudi Tourism Ministry on X.

Under the National Tourism Strategy, the Kingdom aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s gross domestic product from 6 percent to 10 percent.

These goals reflect the country’s commitment to strengthening its tourism sector and enhancing its global appeal.


IMF, Saudi Arabia announce new annual conference tackling global economic challenges

Updated 14 November 2024
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IMF, Saudi Arabia announce new annual conference tackling global economic challenges

RIYADH: The International Monetary Fund and Saudi Arabia will jointly organize a high-level annual conference in AlUla to discuss global economic challenges, it has been announced.

The AlUla Conference for Emerging Market Economies will bring together a select group of finance ministers, central bank governors, and policymakers, along with leaders from the public and private sectors, representatives from international institutions, and members of academia.

According to a joint statement by Kristalina Georgieva, managing director of IMF and the Minister of Finance Mohammed Al-Jadaan, the first edition of this series will be held from Feb. 16-17, 2025.

“The world is confronting deeper and more frequent shocks, including from conflicts, geoeconomic fragmentation, pandemics, climate change, food insecurity, and the digital divide,” according to the statement.

They continued: “If not addressed adequately, these shocks put at risk emerging market economies’ hard-won improvements in living standards. Such setbacks would affect large segments of the world population and put at risk global growth and macro-financial stability.”

The gathering will offer a platform to exchange views on domestic, regional, and global economic developments and discuss policies and reforms to spur inclusive prosperity and build resilience supported by international cooperation.

Recent economic issues affecting the global landscape include rising inflation rates, driven by supply chain disruptions and increased demand for goods post-pandemic.

Supply chain delays continue to impact the availability of essential products, causing bottlenecks in manufacturing and increasing costs.

Additionally, geopolitical conflicts, such as the war in Gaza, have disrupted energy supplies and food exports, leading to global food insecurity and fuel price volatility.

Concerns over the using the Red Sea shipping lane increased dramatically at the end of 2023, when Houthi militants stepped up attacks on vessels in the wake of the escalation of the Israel-Hamas conflict.

The effects of these challenges pose significant risks to economic stability, especially for emerging markets that are more vulnerable to such global shocks.

The AlUla conference is the latest example of the growing relationship between Saudi Arabia and the IMF, with the organization in April establishing its first office in the Middle East and North Africa region in Riyadh.

The facility was launched during the Joint Regional Conference on Industrial Policy for Diversification, jointly organized by the IMF and the Ministry of Finance, on April 24.

The new office aims to strengthen capacity building, regional surveillance, and outreach to foster stability, growth, and integration, thereby promoting partnerships in the Middle East and beyond, according to the Saudi Press Agency.

The work hub will promote closer collaboration between the IMF and regional institutions, governments, and other stakeholders, according to the SPA report.

The IMF also expressed its gratitude to the Kingdom for its financial contribution aimed at supporting capacity development in member countries, including fragile states.


Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn

Updated 14 November 2024
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Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn

RIYADH: The Tadawul All Share Index concluded the last session of the week at 11,791.18 points, down by 139.27 points or 1.17 percent.

The MSCI Tadawul 30 Index also saw a decline, dropping 19.18 points to close at 1,481.36, reflecting a 1.28 percent loss. In contrast, the parallel market Nomu finished Thursday’s trading at 29,467.71 points, up 262.18 points or 0.90 percent.

TASI reported a trading volume of SR11.10 billion ($2.95 billion), with 51 stocks advancing and 182 declining. The top performer of the day was Saudi Cable Co., which saw its share price surge by 5.10 percent to SR92.70.

Other strong performers included Shatirah House Restaurant Co., which gained 3.75 percent to reach SR21, and Arabian Mills for Food Products Co., which rose by 3.08 percent to SR53.60. Naseej International Trading Co. and Saudi Real Estate Co. also posted notable gains.

The worst performer was Saudi Real Estate Co., which dropped 4.94 percent to close at SR10. Alkhaleej Training and Education Co. and Red Sea International Co. also suffered significant losses, with their share prices falling by 4.90 percent to SR29.10 and 4.84 percent to SR68.80, respectively. Astra Industrial Group and Al-Omran Industrial Trading Co. were also among the day’s largest decliners.

On the parallel market, Nomu, Alqemam for Computer Systems Co. was the top gainer, rising by 9.57 percent to SR103. Other gainers included Dar Almarkabah for Renting Cars Co., which climbed 9.10 percent to SR42.55, and Horizon Educational Co., which rose by 7.58 percent to SR79.50. Mulkia Investment Co. and Knowledge Tower Trading Co. also saw significant increases.

On the losing side of Nomu, WSM for Information Technology Co. recorded the largest drop, with its share price falling by 6.18 percent to SR44. Osool and Bakheet Investment Co. and Natural Gas Distribution Co. also experienced notable declines, with their shares dropping by 5.37 percent to SR37.85 and 5 percent to SR57, respectively.

 


Leaders stress urgent need for climate finance at COP29 ministerial dialogue

Updated 14 November 2024
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Leaders stress urgent need for climate finance at COP29 ministerial dialogue

RIYADH: Global climate finance continues to fall short of expectations, as leaders gathered at the COP29 Ministerial Dialogue on Climate Finance to address ongoing challenges and map out next steps.

The meeting, held in Baku, Azerbaijan, underscored the urgent need for increased and more effective funding mechanisms. COP29 President Mukhtar Babayev emphasized that climate finance plays a central role in the broader negotiations.

“The urgency of the situation is evident,” Babayev remarked, pointing to the severe impacts of climate change observed over the past year. “Recently, we witnessed catastrophic flooding in Spain, and in the Pacific region, island communities are faced with the possibility of being wiped out entirely. We must act now; failure to do so will have grave human and economic costs.”

The president stressed the importance of fulfilling the $100 billion-per-year commitment made in Copenhagen and reiterated in Paris, urging leaders to reflect on lessons learned and consider the quality and allocation of financial resources.

Developing countries once again voiced the need for tangible action, with Fiji’s Deputy Prime Minister Biman Prasad highlighting the importance of aligning climate finance with the goals of the Paris Agreement.

“This is a ‘put your money where your mouth is’ moment,” Prasad said. “The 1.5°C temperature goal and the Paris Agreement itself will not be deliverable from both an economic and scientific perspective if we do not invest right. The New Collective Quantified Goal is critical for aligning our priorities and addressing major inconsistencies,” he added.

The EU reaffirmed its commitment to climate finance, noting that the $100 billion goal was first collectively met in 2022, with contributions reaching $115.9 billion.

“The EU and its member states contributed €28.5 billion, or around $30 billion, in climate finance from public sources,” a representative said. “Almost half of the public funding came in the form of grants, with a significant portion provided on concessional terms. We need to make further efforts to facilitate the mobilization of private funding, as it remains a key source of climate finance,” the representative added.

Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, emphasized the critical juncture at which the global community now finds itself.

“The huge opportunities we have and the terrible risks we face are real,” Stiell said. “It’s time to take action to bridge gaps, solve problems, and come together to ensure climate finance and climate action benefit everyone.”

Sweden also announced a significant new contribution, with Ministerial representatives unveiling an $8 billion Swedish krona ($723.6 million) pledge to the second replenishment of the Green Climate Fund.

“This makes Sweden the largest per capita donor to the GCF among the larger donors,” the Swedish representative noted.

As discussions progressed, leaders acknowledged the widening gap between current financial commitments and the funds required to meet the 1.5°C target. There were calls for more robust mobilization of both public and private finance.

The COP29 president concluded: “Delivering the climate fairness that developing countries need is one of the main metrics of shared success. We can learn from past efforts to inform the road ahead, but significant determination and leadership from all parties are required to bridge these critical gaps.”


IsDB, multilateral banks aim for $120bn in annual climate finance by 2030

Updated 14 November 2024
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IsDB, multilateral banks aim for $120bn in annual climate finance by 2030

RIYADH: Multilateral development banks are aiming to mobilize $120 billion annually by 2030 for climate financing in low- and middle-income countries, according to recent projections.

This ambitious funding goal includes $42 billion dedicated to climate adaptation efforts, with an additional $65 billion expected to come from private sector investments.

The target was unveiled in a joint statement issued during COP29 in Baku, Azerbaijan, by several prominent MDBs, including the Islamic Development Bank, African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Development Bank of the Council of Europe, the European Bank for Reconstruction and Development, and the European Investment Bank. Additionally, the Inter-American Development Bank, the New Development Bank, and the World Bank Group are part of the initiative.

The statement emphasized that setting a strong, collective climate finance target is crucial to meeting the goals of the Paris Agreement.

“A new collective quantitative target on climate finance that is both strong and ambitious is essential to achieving the Paris Agreement’s objectives,” the statement read. “We urge parties to reach a robust conclusion on this target.”

For high-income countries, the MDBs have set a target of $50 billion in annual climate finance, including $7 billion specifically for adaptation, with private sector mobilization expected to generate an additional $65 billion. This new target builds on the success of previous climate finance goals, with MDBs already surpassing their climate financing projections for 2025. Since 2019, the MDBs have increased direct climate finance by 25 percent and doubled climate mobilization efforts over the past year.

In response to the urgent need for enhanced climate action, the MDBs also emphasized the importance of establishing a new collective quantitative target for climate finance at COP29. The institutions highlighted their commitment to ensuring that the finance provided leads to meaningful, measurable impacts on both climate mitigation and adaptation.

To further enhance the effectiveness of climate finance, the MDBs released the “Common Approach to Measuring Climate Outcomes,” a framework that provides standardized indicators for tracking global progress on climate mitigation and adaptation. This framework aims to better align MDB activities with global climate goals and improve transparency in measuring outcomes.

Additionally, the MDBs published their “Country Climate Action Platforms,” reaffirming their commitment to strengthening collaboration between host countries, MDBs, donors, and the private sector. These platforms are designed to ensure that climate finance is targeted effectively and that developing countries have the support they need to implement robust climate policies.

COP29 has emerged as a critical moment in global climate negotiations, especially for the Global South, where developing nations are pushing for significant climate financing, stronger adaptation measures, and equitable policy outcomes. These countries continue to advocate for a climate finance framework based on the principle of common but differentiated responsibilities, recognizing that nations’ contributions should reflect their respective capabilities and historical responsibilities.