Brookfield Asset Management is looking to raise $5 billion for a fund backed by the United Arab Emirates (UAE) that aims to scale up climate finance in emerging markets, the Canadian company said on Thursday.

The fund, dubbed the Catalytic Transition Fund (CTF), was announced at the COP28 climate talks in Dubai last December, but this is the first time Brookfield has confirmed its target size.

Anchored by a $1 billion commitment from the $30 billion UAE-based ALTÉRRA fund, the first close of the CTF is expected by the end of 2024, Brookfield said in a statement.

The first close of a fund refers to when it has secured enough commitments to start making investments.

Excluding China, developing economies get less than 15% of the world’s clean energy dollars despite being responsible for nearly a third of global emissions, and as a result investments there can often have a bigger impact, Brookfield said.

Returns to the ALTÉRRA fund will be capped at an unspecified amount, allowing other investors to secure better risk-adjusted returns. At least 10% of the fund’s capital will be provided by Brookfield, which manages $925 billion in assets.

“The Catalytic Transition Fund is a private market solution to the global challenge of delivering transition investment to emerging markets,” said Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management.

ALTÉRRA Chief Executive Majid Al-Suwaidi said the world needed to pick up the pace “significantly” on addressing climate change and its investment in the CTF would “supercharge investment in emerging markets”.

Reuters