Opec Fund 'happy' to take on ambitious climate financing pledge

Director-General Abdulhamid Alkhalifa speaks to The National at the World Bank spring meetings in Washington

The Opec Fund for International Development laid out an ambitious agenda last year, raising its climate financing to 25 per cent by 2025 and 40 per cent by 2030.

Its Climate Action Plan is designed to boost the organisation's support for sustainable development in partner countries, with climate investments in energy, transport, food and water as well as other initiatives.

“It's a challenge, but we are a development institution that feels its responsibility and we are taking those responsibilities seriously, and we have to do this kind of job,” said Abdulhamid Alkhalifa, director-general of the Opec Fund.

“We are happy to take that challenge.”

Speaking to The National at the 2023 spring meetings in Washington, Dr Alkhalifa addressed the ways the Opec Fund is tackling the “twin challenges” of climate change and energy poverty.

“As we speak, there is millions, millions of people in low-income countries who have no access to energy or electricity,” Mr Alkhalifa said.

Energy is one of the largest drivers of development, but generating energy by burning fossil fuels is responsible for a large portion of greenhouse gasses. The challenge, then, is to support the development of low- and middle-income countries through clean energy.

One way the Opec Fund is addressing these twin challenges is by working with low-income countries on clean cooking, or preparing food in a way that causes fewer harmful emissions.

A third of the global population — 2.4 billion people — lack clean cooking access, data from the World Health Organisation showed. Those in low- and middle-income countries are particularly vulnerable to disease and death because of the harmful toxins released when using other methods.

“But also we are not stopping at that level,” Mr Alkhalifa said, pointing to recent initiatives on reforestation.

Clean cooking also helps to empower women, he added, as it greatly reduces the time-consuming efforts of collecting wood that could instead be used to further education and other priorities.

“And this is, maybe, a long-term objective, but it is on our radar screen,” Mr Alkhalifa said.

The focus of the Opec Fund's initiatives also stretches into food security.

The organisation last year announced a $100 million loan to Jordan, one of the countries hit hardest by the food crisis caused by the prolonged war in Ukraine.

Jordan is a net importer of food and more than 10.5 million people — including 1.3 million Syrian refugees — have been affected by the crisis, the Opec Fund said in its announcement.

Mr Alkhalifa said the Opec Fund was not only working with Jordan on food security, but many other countries as well.

Cop28 to be a model for future climate summits

At Cop27 in Egypt, the Arab Co-ordination Group — whose members include the Opec Fund and the Abu Dhabi Fund for Development, among other organisations — pledged to provide $24 billion by 2030 towards accelerating the energy transition in developing countries.

With Expo City Dubai set to host Cop28 this year, the focus has been on the need to work collectively to provide financing to meet climate goals. Developing countries that make up most of the world's population are only receiving 20 per cent of clean technology investments.

Yearly, clean energy investment in developing countries needs to increase more than seven times if the world is to reach net-zero emissions by 2050, according to a report from the International Energy Agency.

Dr Sultan Al Jaber, President-designate of the Cop28 summit, told the Copenhagen Climate Ministerial last month that this year's event must build on the inroads made during Cop27.

Mr Alkhalifa said the Opec Fund was working with the UAE and other development institutions to make Cop28 a success “for even beyond what is expected from these kinds of meetings”, and expressed hope the event could be a model for other climate summits moving forward.

“We hope to make this event as an example for a successful Cop, and I hope the coming Cops will take it as a model to replicate in the future,” he said.