IFC, Abu Dhabi Fund for Development agree to USD 1.5 bn co-investment in EM energy transition: The International Finance Corporation (IFC) signed an agreement yesterday with state-owned Abu Dhabi Fund for Development (ADFD) to jointly invest USD 1.5 bn in the energy transition for emerging markets, IFC Director General Makhtar Diop said, according to Reuters. Diop made the announcement at the World Government Summit, an annual meet-up of government leaders that kicked off in Dubai yesterday and is running until Wednesday. No details were provided on the timeframe of the USD 1.5 bn co-investment or which economies it will specifically target.

The co-financing will boost IFC investment in green hydrogen in particular, Diop said in an interview with BloombergTV yesterday (watch, runtime: 04:32). The IFC has been upping its investment in renewables in the last few years and is working with multiple stakeholders — including the IEA and representatives of capital markets — to “pave the way for a greener economy,” he added. “We’ve been accelerating this because we believe that with the challenges we’re facing with climate change, there’s no option but to invest in renewable energy.”

We’ve seen the IFC upping its MENA renewables investment recently: The IFC plans to allocate 35% of its investments to green sectors — including MENA renewables — its MENA head of regional operations Sufyan Al Issa said in December. Egypt in particular holds significant potential, along with the GCC, Morocco and Jordan, Al Issa noted. This followed news that the IFC is co-financing renewables projects of roughly 1 GW that are being launched by UAE firm Al Nowais’ subsidiary Amea Power in Egypt, also announced in December. The IFC, Dutch development bank FMO and Japan International Cooperation Agency (JICA) will collectively provide USD 500 mn for a 560 MW solar plant, while the IFC, three commercial banks and the Japanese Bank for International Cooperation will provide USD 500 mn for a 505 MW wind farm. The IFC is also co-financing Tunisia’s 100 MW Kairouan solar plant, along with the African Development Bank (AfDB) and the Clean Technology Fund (CTF), estimated to cost some USD 100 mn.

ADFD has also been supporting growth in renewables: ADFD provides international aid in the form of concessionary loans to economic and social development projects. When it comes to renewables, ADFD is an anchor investor in the International Renewable Energy Agency’s (IRENA) Energy Transition Accelerator Financing (ETAF) platform, to which it contributed USD 400 mn when ETAF was launched at COP26 in 2021. More recently, it also co-financed Masdar’s 230 MW solar plant in Azerbaijan, which reached financial close in August.