Energy

COP29 sets out US$1.3 trillion climate finance target

COP29 concluded with the Baku Finance Goal agreement. (Image source: UNFCCC)

There has been a mixed response to the outcome of COP29 and the Baku Finance Goal (BFG) that was announced in the final hour

There was plenty of drama in the conclusion of the 29^th edition of the United Nations Climate Change Conference, held in Baku, as international stakeholders representing 200 countries vied to hammer out a deal that would continue the energy transition and support developing countries in their battle against climate change.

The conference opened under headlines dominated by Ilham Aliyev, the President of country host Azerbaijan, who described oil and gas as a “gift from God” and criticised misinformation spread by western media, charities and politicians. From this point, persistent protests from climate demonstrators and campaigners set the background clamour for the event as it ran through the agenda, as the spotlight began to focus the eventual deal that would mark its success, or otherwise.

As the debate began in earnest, the temperature began to rise and at one point in the proceedings it appeared as though a deal might not be reached following the breakdown of discussions and dozens of nations walking out.

However, this tumultuous finale, delegates returned to the room and a period of intense diplomacy saw a new deal struck in the dying hours of the conference

Over the line in Baku

The culmination of the debate was announced in the form of the BFG.

This represents a commitment to channel US$1.3 trillion of climate finance to the developing world each year. At its core is a target for developed countries to take the lead on mobilising at least US$300bn per year for developing countries by 2035.

In addition, there was a conclusion for the Article 6 negotiation on high integrity carbon markets under the UN. According to the COP29 announcement, financial flows from complaint carbon markets could reach US$1 trillion per year by 2050 and have the potential to reduce the cost of implementing national climate plans by US$250bn per year.

“We have unlocked one of the most complex and technical challenges in climate diplomacy,” said COP29 lead negotiator Yalchin Rafiyev. “Article 6 is hard to understand, but its impacts will be clear in our everyday lives. It means coal plants decommissioned, wind farms built and forests planted. It means a new wave of investment in the developing world.”

In addition, the full operationalisation of the Loss and Damage Fund was unveiled after originally being agreed during COP27 in Egypt. The fund aims to provide financial assistance to countries most vulnerable to the impacts of climate change, with the decision to launch operations made agreed during COP28.

COP29 went further by ensuring the fund’s operationalisation, including several important related agreements including the Trustee Agreement and the Secretariat Hosting Agreement. To date, the total pledged financial support for the fund exceeds US$730mn.

The best outcome or an “optical illusion”?

“When the world came to Baku, people doubted that Azerbaijan could deliver. They doubted that everyone could agree. They were wrong on both counts,” remarked COP29 President, Mukhtar Babayev. “With this breakthrough, the Baku Finance Goal will turn billions into trillions over the next decade. We have secured a trebling of the core climate finance target for developing countries each year.

“The Baku Finance Goal represents the best possible deal we could reach, and we have pushed the donor countries as far as possible. We have forever changed the global financial architecture and taken a significant step towards delivering the means to deliver a pathway to 1.5°C. The years ahead will not be easy. The science shows that the challenges will only grow. Our ability to work together will be tested. The Baku Breakthrough will help us weather the coming storms.”

This positive judgement is not one universally shared however, with critics suggesting that developed countries were not meeting their responsibilities to raise resources to support developing nations. Indian negotiator, Chandni Raina was one of the leading voices in dissent, labelling it “an optical illusion” that “will not address the enormity of the challenge we all face.”

Ali Mohamed, Kenya’s special envoy for climate change and chair of the African group of negotiators, also expressed his disappointment. “Africa leaves Baku with realism and resignation as COP29 progress falls far short of our hopes,” he stated in a post on X. “When Africa loses, the world loses – its minerals, biodiversity & stability. The US$300bn/year by 2035 is too little, too late for a continent facing climate devastation while contributing least to emissions.”

While the debate continues for the time being over the effectiveness of the new deal, eyes are already looking ahead to COP30 which will be hosted in Brazil from 10-21 November 2025. Certainly, these proceedings will be heavily coloured by a new leader amongst the developed countries in the form of US President Donald Trump. Having recently nominated a fracking CEO to lead the US Energy Department, there are fears the President will step back from the country’s climate commitments.

Time, then, will tell whether the critics of the BFG are proven correct or whether the agreement will hold together the climate effort in the potentially subdued conferences that could lie ahead.

AfDB’s Climate Action Window Technical Assistance Facility launched at COP29

Key stakeholders for the launch posing for a picture at COP29.

Launch of the facility will enable the African Development Bank to increase the reach of the CAW's efforts. (Image source: AfDB)

African Development Bank (AfDB) has unveiled its new Climate Action Window (CAW) Technical Assistance Facility at COP29

Before the conference, which is running in Baku from 11-22 November, the organisation stated its intention to mobilise additional resources for climate action in Africa and to launch a new approach to assess African economies. Following this, it has taken a ‘major step’ to address the continent’s climate finance gap by launching a new funding call with an initial allocation of US$56mn.

The CAW Technical Assistance Facility will support the preparation, financing and implementation of adaption and mitigation projects aligned with the Paris Agreement, Nationally Determined Contributions (NDCs), and National Adaption Plans (NAPs). It will aim to transform the development of climate projects across 37 low-income countries in the continent and is backed by funding commitments from partners such as the United Kingdom, Netherlands, Germany, and Switzerland. It will be accepting proposals from governments, regional organisations, NGOs, and Un agencies in ADF countries via its online portal.

“The CAW provides a veritable channel for countries to meet their global climate commitments,” remarked Kevin Kariuki, vice president of power, energy, and climate change at AfDB. “This facility will ensure that projects in Africa’s most climate-vulnerable regions are well positioned to attract significant funding, creating a win-win scenario where countries can achieve climate targets, while advancing sustainable development."

Enabling adaption projects in Africa

The launch was supported by a number of stakeholders from the countries that are set to benefit from the initiative who welcomed the new initiative.

“I would like to thank the African Development Bank and its partners, as these funds will finance the resilience of our people,” commented Côte d’Ivoire’s Minister of Environment and Sustainable Development, Assahoré Konan Jacques. “Specific activities have been identified and targeted, and I call on the African Development Bank to learn from the challenges other funds have faced, ensuring that CAW succeeds where others have struggled.”

Fatima Haram Acyl, the Chad Minister for Economy and Planning, added, “For countries like Chad, climate vulnerability is not just a term. Our people face floods, droughts, and immense losses, and we need real, fast-acting solutions. The CAW presents an opportunity to deliver transformative projects that strengthen our communities' resilience.”

Max Andonirina Fontaine, Madagascar’s Minister of Environment, surmised, “The CAW enables African nations to pilot initiatives that truly address our needs. With its flexible approach, we can, for example, fund ecotourism projects in Madagascar that both protect forests and create jobs – support that Africa urgently needs.”

Five solar mini-grids power sustainable access in Zambia

Leaders of the involved organisations walking through a concrete area with solar panels in the background.

In addition to the ENGIE equity injection, the initiative is also partially financed through the Facility for Energy Inclusion (FEI), managed by Cygnum Capital. (Image source: ENGIE Energy Access)

ENGIE Energy Access, a provider of off-grid solar solutions, has inaugurated five new solar mini-grids in Zambia as part of the ‘Increased Access to Electricity and Renewable Energy Production’ (IAEREP) initiative funded by the European Union

ENGIE Energy Access is committed to delivering 71 solar mini-grids across the country over the next two years, providing more than 70,000 lives in rural communities with clean energy in the process. Boasting a total installed capacity of 5.7MW, the mini-grids will power homes, schools, healthcare centres, businesses and government offices.

“Today’s inauguration represents a powerful step forward in our mission to bring life-changing, affordable, reliable, and sustainable energy solutions to the underserved communities in Zambia,” remarked CEO of ENGIE Energy Access, Gillian-Alexandre Huart. “These solar mini-grids are a game-changer for these communities. By providing clean energy, we are lighting up homes and empowering women and men, supporting businesses, in building a cleaner, more sustainable future. We are thrilled to anchor our ambition in the 1,000 mini-grid vision of H.E. the President of the Republic of Zambia Hakainde Hichilema. I am very proud of our dedicated team and grateful for our strong partnerships with the EU and the Government of Zambia.”

Reliable power for Zambia

The first 15 sites are expected to be fully operational before 2024 comes to a close. ENGIE Energy Access, in partnership with SagemCom as the contracted EPC, will construct, own, and maintain the mini-grids, ensuring reliable power for residential and commercial customers.

Helen Zulu, country director for ENGIE Energy Access Zambia, commented “Our team is deeply dedicated to creating opportunities for rural communities in alignment with our mission to deliver affordable, reliable and sustainable energy solutions. These mini-grids define the true meaning of life changing solutions, they will fuel entrepreneurship, improve education, and support better health outcomes for thousands of Zambians. We remain committed to going the extra mile in progressing energy access for communities that are beyond the grid.”

Chifunda Sikazwe, head of mini-grid operations at ENGIE Energy Access, also added, “Our solar mini-grids are designed to be simple yet highly adaptable and reliable in delivering service. We have utilized the latest technology and offer a flexible pay-as-you-go model through smart metering making electricity accessible to customers with varying payment capacities. Additionally, we prioritize safety in construction and are committed to strong environmental stewardship throughout Zambia.”

Teraco turns to solar to power data centres

Light reflecting off of a panel at a solar farm.

The plant is expected to come online in late 2026. (Image source: Teraco)

Teraco, part of Digital Realty and a provider of interconnection platforms and vendor-neutral colocation data centres, has started construction on a 120MW utility-scale solar PV power plant in South Africa's Free State province

Teraco will own this 120MW solar PV facility and transfer its renewable energy to power its data centres, marking a step toward establishing a self-sustaining energy source for next-generation cloud and AI computing needs. The plant is set to be operational by late 2026.

“Driving renewable energy infrastructure investment at a time when computing applications such as artificial intelligence are using increased power is an industry imperative. The need is even more acute in South Africa, given its electricity generation constraints and current levels of renewable energy penetration. This is a significant step toward meeting our renewable energy ambitions and those of our clients. It is also only the first phase of our longer-term renewable energy commitment, with the construction commencement marking an important milestone in what has been a long journey over the last several years, and we are now looking forward to driving the project to completion,”commented Jan Hnizdo, CEO at Teraco.

"In South Africa, we have various energy challenges, and this presents an incredible opportunity to support the needs of our broader community through the addition of generation capacity to our constrained grid, while meeting Teraco’s near term renewable energy objectives. This represents a unique holistic approach since Teraco plans to not only own its data centres, but also to power them with a renewable energy source, creating a sustainable path to growth. This initiative aligns with Teraco’s long-term vision of powering digital transformation across Africa. South Africa’s solar power represents a competitive advantage for data centres relative to other locations,” continued Hnizdo.

Power to remote locations

In February, Teraco secured grid capacity allocation from Eskom for the solar plant and has since worked to finalise the plant's design and the wheeling arrangements between Eskom and the municipalities of Ekurhuleni and Cape Town, where several Teraco data centres are located.

Wheeling renewable energy across power grids allows energy generated in remote locations to reach end-users in urban areas by utilising existing transmission systems, enabling renewable energy projects to be deployed in high-yield areas for optimal generation. This project, with wheeling across multiple municipalities, is a first for South Africa's renewable energy sector.

Bryce Allan, Teraco's head of sustainability, explained, “Teraco considers this project essential to achieving its renewable energy ambitions and believes it will pave the way for other municipality renewable energy wheeling projects. This will ultimately assist municipalities in attracting new investments and remaining competitive as local and international companies become increasingly sensitive to the carbon intensity of their electricity supply.”

A call for greater North-South unity at ADIPEC

The panel emphasised South-South collaboration. (Image source: Alain Charles Publishing)

During a panel session at recently-concluded ADIPEC 2024 Exhibition & Conference, industry stakeholders discussed ways to increase collaboration between countries in the global South and the global North.

The discussion focused on energy transitions and the role of OPEC in ensuring energy access. Key points included the need for diverse energy sources, with OPEC advocating for all forms of energy, not just renewables. The conversation highlighted energy inequalities, such as Heathrow Airport consuming more energy than Sierra Leone.

The Paris Agreement was emphasised as a reduction of emissions, not a phase-out of fossil fuels. The East Africa pipeline and Uganda's oil projects faced financing challenges but are progressing.

The importance of South-South cooperation and regional collaboration in energy projects was underscored, with examples from Uganda, Cyprus, and Sierra Leone.

His Excellency Haitham Al Ghais, Secretary General of OPEC, explained why fossil fuels will continue to play an important role in the global South.

“We talk about the importance of another factor, which is urbanisation. By 2030 which is less than six years from today, we're going to have over 582 million people, nearly 600 million people, moving into new cities all around the world, again in non OECD developing parts of the world,” he said.

“The Paris Agreement, ladies and gentlemen, is about reduction of emissions. It's not about phasing out or phasing down or keeping the oil under the ground. It's about reducing emissions that includes technology, that includes investing in renewables, investing in all sources of energy.”

“We have the OPEC Fund for International Development, an agency, a sister agency, based in Vienna, that is very active in Africa and other parts of the world in developing and promoting socio economic development projects, energy projects as well as renewable energy projects.”

“We also have the charter of cooperation, which we signed in 2019 which is a platform that is open for oil producers to participate in, whether it's exchange of technologies, exchange of experiences between various member countries and non OPEC producers who are not members of OPEC that can participate in this platform to gain access to the best practices being implemented in our member countries.”

Growing collaboration

Uganda’s Minister of Energy and Mineral Development Ruth Nankabirwa, said, “The East African crude oil pipeline was a negotiated project, and it was a win-win. My president wanted all the oil refined in Uganda, but because we didn't have money to do it by ourselves, we collaborated with investors and we let some of the crude leave the country, while some is refined, which will come with industrialisation.”

Deputy Minister of Energy for Sierra Leone Edmond Nonie, said, “We have big clients in the mining sector who have the capital to pay and have the willingness to pay for lower priced electricity from the grid. So we are embarking on a campaign to connect these mining companies, and once we have these transmission lines out to these companies, we can then do the further, last mile connection to our communities.”

Meanwhile, Cyprus is collaborating with Egypt for energy transmission.

The country’s Minister of Energy, Commerce and Industry, George Papanastasiou, said, “The conversation with my colleagues in Egypt is to utilise the [Egyptian] infrastructure [for export]. Secondly, there are pipelines that cross the eastern Mediterranean, which reach Egypt. And the infrastructure in Egypt, there are two LNG terminals, liquefaction plants in Egypt, which are under-utilised.

“This is possibly the destination in order to reach the markets. Of course, there is the domestic market of Egypt as well, which is very important. We all know that power generation in this country is mostly coming from natural gas. Cyprus is very well positioned, and at the right time in order to support and provide the natural gas and use the infrastructure in order to reach the international markets.”