Azerbaijan initiates $500 million fund for "green projects" ahead of COP29

Azerbaijan has embarked on its first significant move to attract climate finance in preparation for the upcoming UN COP29 summit in Baku this November, aiming to raise at least $500 million for "green projects."

Baku plans to launch the initiative under the working title "Climate Investment Fund for the Future," with support from the State Oil Company of Azerbaijan (SOCAR), Caliber.Az reports via foreign media.

The fund intends to secure additional capital from other fossil fuel producers.

Officials from COP29 indicated that this fund marks a starting point for fossil fuel companies to contribute, allowing them to provide lump sums or portions of their revenues. This development follows Azerbaijani President Ilham Aliyev's defence earlier this year of the country's natural reserves, asserting their continued necessity due to Europe's energy demands.

During COP28 in Dubai, nearly 200 nations agreed on the need to transition away from fossil fuels in a structured manner to achieve zero emissions by 2050, notes the publication. A senior COP29 official emphasized that any returns from investments in the climate-focused fund will be reinvested, with ongoing discussions among Azerbaijani officials to allocate 50% of the capital to developing countries.

"We will approach potential contributors once the concept is finalized... Our aim is to involve all countries producing and utilizing fossil fuels in this initiative," stated the official, emphasizing that the fund will not impose levies on fossil fuel companies.

However, recent UN climate talks in Bonn saw friction between developing and developed nations over new climate finance targets. The previous goal of $100 billion annually, set in 2009, was only reached last year after reclassifying existing aid, with the EU and US urging countries like China and Saudi Arabia to contribute more in light of their economic growth. Resistance arose, arguing that historic emissions have disproportionately benefited richer economies, leaving UN climate negotiators disillusioned about achieving elevated climate targets at COP29 to combat global warming's effects.