Ready, set, action!

For the third time in a row the OPEC Fund participated in the UN Climate Change Conference (COP), which in 2024 took place in Baku, the capital of Azerbaijan. For the second time in a row a large oil producer hosted the world’s most important environmental gathering. The optics were not the only thing that sparked an unusual amount of controversy. 

This notwithstanding, there was general agreement on the importance of the conference. Billed in advance as a “Finance COP” the summit finally agreed on a new climate deal with wealthy countries pledging to provide US$300 billion annually by 2035 to poorer countries to help them cope with the increasingly dramatic impacts of the climate crisis – a figure many developing countries criticized as vastly insufficient. 

Vulnerable small island states and the least-developed countries in particular criticized the agreement as insufficient and inadequate. “We are leaving with a small portion of the funding climate-vulnerable countries urgently need,” said Tina Stege, Climate Envoy of the Marshall Islands in the Pacific. 

While the agreement also refers to a wider ambition to scale up to US$1.3 trillion, developing nations wanted rich countries to commit to taking on a much larger share of this, and for the money to come predominantly in the form of grants rather than loans, which they fear will trap them further in debt. 

The OPEC Fund was present at COP29 with its own pavilion and a delegation headed by President Abdulhamid Alkhalifa to highlight its growing ambition in climate action, forge new partnerships and deepen existing relationships. The OPEC Fund is significantly exceeding its own climate financing targets and well on track to deliver 40 percent climate financing by 2030. 

President Alkhalifa said: “We have developed a multi-faceted approach that combines financing with policy dialogue, technical assistance and knowledge sharing. While we are proud of the progress we are making we also realize that the task is enormous and can only be addressed if we all join forces.” 

Shortly before the start of COP29, the EU’s Copernicus Climate Change Service published new data showing that 2024 was about to be the hottest year on record and the first to exceed the 1.5°C target set in the 2015 Paris Agreement. Latest UN data confirmed that 2024 was indeed the hottest year on record with an increase of 1.55°C above pre-industrial temperatures. 

The Paris Agreement aims to limit “the increase to well below 2°C above preindustrial levels,” while pursuing efforts to keep “the temperature increase to 1.5°C above pre-industrial levels.” The 2°C goal is the upper limit scientists have set to keep climate change from hitting an irreversible tipping point with potentially catastrophic consequences. 

Highlights of OPEC Fund activities at COP29 included President Alkhalifa’s participation in the Ministerial Dialogue on “Scaling up investment for Tripling Renewables and Doubling Energy Efficiency,” the panel with the International Fund for Agricultural Development (IFAD) on “Navigating Climate Challenges: Future of Marine Ecosystems and Coastal Communities” and the discussion on “Making Climate Finance Work for Climate Action in Agriculture and Food Security” with the Food and Agriculture Organization of the United Nations (FAO), World Bank and United Nations Development Programme (UNDP). 

The OPEC Fund President also engaged in bilateral meetings, among others with the host country Azerbaijan, with which a Technical Assistance agreement was signed. The President was joined by a high-level delegation including Tarek Sherlala, Vice President, Finance, and Al Shaimaa Al-Sheiby, Vice President, Public Sector Operations & Acting Vice President, Strategy. 

Raising the OPEC Fund’s profile and visibility, the delegation also launched the institution’s first Climate Finance Report. The report provides a comprehensive overview of the OPEC Fund’s climate strategy, a thorough examination of its delivery and a roadmap for achieving the 2030 target. 

While President Alkhalifa welcomed the achievements to date, he also acknowledged: “We know the journey can’t end here. By channelling resources and fostering partnerships we will deepen our focus on renewable energy, nature-based solutions and sustainable agriculture in support of a just energy transition across our partner countries.”