BAKU: As global leaders gather in Baku for the COP29 UN climate change conference, the focus on climate finance has never been more pressing. This year’s conference theme, “Accelerating Climate Action for Sustainable Development,” suggests that climate action must advance economic stability as well as address environmental concerns.

Yalchin Rafiyev, Azerbaijan’s lead negotiator for COP29, has said that “trillions of dollars” are needed to fund the fight against climate change — a significant increase from the longstanding annual target of $100 billion, which itself remains unmet. Vulnerable nations are especially affected by this shortfall, lacking the resources to build resilience against climate impacts.

The need for equitable financing

Delegates from developing regions, including African representatives, have called for climate finance to reflect the distinct economic realities faced by less developed countries.

Shaimaa Al-Sheiby, senior director of strategic planning at OPEC, spoke to Arab News about the importance of ensuring that climate finance meets the needs of developing economies

“In many countries, it’s difficult for governments to sustain economic progress without accessible financing,” Al-Sheiby said. She advocated for wealthier nations and financial institutions to play a greater role in “de-risking” investments in developing markets to attract private capital for renewable projects.

Yusuf Idris Amoke, a Nigerian climate adviser, said: “The Global South is on the receiving end of climate impacts while contributing far less to emissions.”

For these countries, the push to phase out fossil fuels often clashes with immediate economic needs, especially given that alternatives are limited and expensive.

“Financing third world countries or the Global South is key,” Amoke added, saying that transitioning without robust financial support is neither equitable nor feasible.

Voluntary carbon markets and climate solutions

Voluntary carbon markets have been gaining traction as a flexible solution for reducing emissions, especially in regions where compulsory systems have struggled to achieve significant results.

These markets encourage companies to take part in climate initiatives by creating financial incentives, which, as Al-Sheiby said, are essential for involving the private sector.

“Private capital is very shy,” she added, saying that risk-reduction strategies could help attract these funds to where they are most needed.

The success of voluntary markets, however, depends on strong regulatory support, transparency and accountability.

Global initiatives and South-South collaboration

The COP29 Presidency has launched the Baku Initiative for Climate Finance, Investment and Trade, a collaborative platform designed to align climate finance and trade with sustainable development priorities. By convening leaders from developed countries and the Global South, the initiative aims to foster equitable climate solutions.

In Africa, Saudi Arabia’s “Empowering Africa Initiative” exemplifies South-South collaboration. Minister of Energy Prince Abdulaziz bin Salman has signed agreements with Ethiopia, Chad, Senegal and other countries to promote energy equity as well as accelerate the continent’s energy transition. These agreements are set to harness Africa’s vast renewable energy potential, including its 10 terawatts of solar capacity.

Abid Malik, ACWA Power’s geo head for Central Asia, highlighted the importance of fostering local expertise during an interview with Arab News. “Our projects in Africa don’t just bring renewable energy; they create jobs, enhance technical skills and empower local communities to take charge of their energy futures,” he said.

The intersection of climate finance and conflict recovery

The recently announced Baku Call on Climate Action for Peace, Relief and Recovery highlights the role of climate action in stabilizing conflict-affected regions. “Climate-induced challenges such as water scarcity and food insecurity are catalysts for conflict,” said Mukhtar Babayev, COP29 president. “Peace-sensitive climate action is crucial for the most vulnerable.”

Gilles Carbonnier, vice president of the International Committee of the Red Cross, highlighted the environmental fallout in conflict zones like Gaza. “In places like Gaza, where infrastructure has been decimated, renewable energy offers a lifeline,” he told Arab News. “Solar microgrids in refugee camps are providing critical electricity for healthcare and other essential services.”

Charting a path forward

The commitments announced at COP29 reflect a growing recognition of the interconnected challenges of climate finance, energy equity and conflict recovery. With asset owners controlling $10 trillion pledging to accelerate private capital deployment and initiatives like BICFIT gaining momentum, the foundations for transformative change are being established.

For vulnerable nations, these efforts offer a glimmer of hope. However, achieving a just transition will require sustained political will and a reimagining of global financing systems. As COP29 unfolds, the world is watching to see if the pledges made in Baku will translate into tangible action.

RIYADH: Saudi Arabia’s real estate tech platform Ejari secured the largest startup investment across the Middle East and North Africa in October as the region faced a funding slowdown.

The firm benefited from a $14.65 million seed financing round led by PFG and BECO Capital, underscoring the importance of early-stage investments.

This success came against a backdrop of a funding fall for the MENA region, which saw $134 million secured across 56 deals.

This represented a 52 percent month-on-month decline and a 13 percent decrease from the same period last year, indicating ongoing challenges in the region’s investment climate, according to Wamda’s monthly report.

Debt financing played a notable role, accounting for $28.4 million, or 21 percent of the total amount.

UAE-based startups led the region, raising $61.8 million across 15 deals, while Saudi Arabia followed closely with $50 million raised across 21 transactions.

Kuwait’s position was boosted by property technology firm Sakan’s $12 million round, contributing to a total of $13.5 million secured by Kuwaiti entrepreneurs.

The Egyptian startup scene struggled, with only eight startups raising a combined $1.6 million, highlighting a sharp downturn.

Meanwhile, Tunisian and Qatari startups performed comparatively well, securing $3 million and $2.7 million, respectively.

Fintech, which had dominated the region’s funding landscape earlier in the year, fell to second place in October.

Proptech took the lead, attracting $38 million over five deals.

The e-commerce sector raised $14.6 million, while education technology startups secured $11 million across seven deals.

Investor preference leaned toward early-stage startups, with seed funding accounting for $40 million, or 30 percent of the total raised.

Series A investments reached $20 million across three deals, and pre-seed funding contributed $15.5 million. Notably, nine startups secured $25.8 million without disclosing their stage.

The business-to-consumer model was the favored choice, garnering $83.8 million across 19 startups, while business-to-business ventures attracted $42.4 million over 27 deals.

Ten startups operating a hybrid model received nearly $8 million.

Female-founded firms saw an encouraging rise, collectively raising $10.5 million across four transactions. 

However, male-founded startups continued to dominate, securing $115 million across 31 deals.

Saudi open banking startup Lean closes $67.5m in series B round

Lean Technologies, a Saudi-based open banking platform, has raised $67.5 million in a series B funding round led by US-based General Catalyst.

This round marks one of the largest equity investments by a US venture capital firm in Saudi Arabia’s fintech sector. Other participants included Bain Capital Ventures, Duquesne Family Office, and Arbor Ventures.

Founded in 2019 by Hisham Al-Falih, Ashu Gupta, and Aditya Sarkar, Lean provides businesses with access to bank data and payment solutions.

The company, regulated by the Abu Dhabi Global Market, claims it has processed over $2 billion in transactions through its account-to-account payment offerings, serving clients like e&, DAMAC, and Careem.

In Saudi Arabia, Lean’s launch of data services under the Saudi Central Bank’s regulatory sandbox has facilitated nearly 1 million bank account verifications, supporting clients in sectors such as insurance, lending, and e-commerce, including companies like Tawuniya, Abdul Latif Jameel Finance, and Salla, as well as Tabby, and Tamara.

Al-Falih, CEO of Lean Technologies, stated that the funding will be used to expand Lean’s product offerings and support its growth strategy across the Middle East.

“Our aim is to enhance the financial ecosystem by providing accessible solutions that meet the needs of businesses and consumers alike,” Al-Falih said.

Neeraj Arora, managing director at General Catalyst, said: “Lean has demonstrated a strong commitment to solving local market needs and has earned significant customer loyalty. We see Lean as a key player in building the infrastructure needed for the region’s fintech growth.”

The new funding is expected to bolster Lean’s pay-by-bank and open banking solutions, allowing the company to scale operations and deepen its market presence in the region.

UnifyApps secures $20m to fuel ME expansion

UAE-based Software-as-a-Service solutions provider UnifyApps has closed a $20 million series A funding round led by Iconiq Growth, with participation from Elevation Capital.

The round brings UnifyApps’ total funding to $31 million since its inception in 2023. The company, co-founded by Pavitar Singh, Abhishek Khurana, focuses on automating enterprise workflows across multiple applications.

“UnifyApps understands that you need a holistic approach to achieve trusted, effective AI agents,” said Matt Jacobson, general partner at Iconiq Growth.

“By aligning every data source and application to an enterprise use, they are enabling AI to actually understand and orchestrate work,” he added.

Pavitar Singh, CEO of UnifyApps, emphasized the strategic value of the new partnership: “UnifyApps is deeply grateful for the opportunity to work with Iconiq Growth. Their deep network and partnership will be instrumental in our next stage of growth as we bring our AI agent platform to enterprises everywhere.”

UAE’s Epik Foods raises $15.5m

Epik Foods, a UAE-based food and beverage group, has raised $15.5 million in private capital funding from Ruya Private Capital I, LP, a fund managed by Ruya Partners.

The funding will be used for acquisitions, working capital, and supporting the company’s expansion plans, particularly into Saudi Arabia, as well as strengthening its presence in the UAE.

Established by Khaled Fadly and Ranya Basyuni, Epik Foods was formed in 2023 following a merger of three F&B entities – KR&CO, Sweetheart Kitchen, and Happy Platters Kitchens – in partnership with Gulf Islamic Investments, a Shariah-compliant global investment firm which manages over $4.5 billion in assets.

Epik Foods currently oversees a portfolio of 60 food and beverage brands operating across 50 locations in the UAE and Saudi Arabia, with an additional 20 outlets slated to open as part of its ongoing expansion strategy.

Efreshli advances interior design tech with new funding round

Egyptian interior design startup Efreshli has raised an undisclosed amount in its latest seed round, led by Algebra Ventures.

The round also saw participation from 500 Startups, Dar Ventures, and various angel investors.

Founded in 2019 by Heba El-Gabaly, Efreshli leverages virtual decor tools to help customers visualize room setups before making purchases.

CEO El-Gabaly expressed optimism about the company’s growth trajectory, saying: “I’m excited about this significant milestone for Efreshli. With new funding and with Dina El-Haddad joining as co-founder and CPO (chief product officer), we can accelerate our tech-driven growth and take Efreshli to new heights.”

El-Haddad added: “I’m thrilled to be part of Efreshli’s journey to revolutionize the home furnishing experience. Efreshli’s future is more than just furniture; it’s about building an entire ecosystem. With innovations like Efreshli Pro, we’re connecting the dots for everyone, from customers to designers.”

The new funding will be directed toward enhancing Efreshli’s offerings and expanding its product line, reinforcing its mission to make interior design accessible across the region.