Brookfield Asset Management has successfully raised $2.4 billion for its inaugural climate-focused fund, with backing from Abu Dhabi’s Mubadala Investment Company. This marks a pivotal step in Brookfield’s efforts to support global decarbonization projects. The first phase of fundraising, which is part of a larger initiative to reach a $15 billion goal, underscores the growing international commitment to addressing climate change through substantial private investment.

Brookfield’s new fund, launched as part of its transition investment strategy, aims to mobilize capital for projects that advance the shift to a low-carbon economy. Mubadala, which holds a significant role in Abu Dhabi’s strategic investment framework, committed $500 million to the fund. This partnership signals a deepening collaboration between Abu Dhabi and global financial institutions, as both entities position themselves at the forefront of sustainable investment.

The $2.4 billion initial close signals robust investor confidence in Brookfield’s climate strategy. The firm, with a global track record in infrastructure and renewable energy, seeks to channel capital into projects that can reduce carbon emissions across critical sectors. These include renewable power generation, energy storage, and the retrofitting of existing energy infrastructure to be more environmentally friendly.

Brookfield, headquartered in Toronto, manages over $825 billion in assets and has been steadily increasing its focus on renewable energy and sustainability projects. Its renewable energy unit is one of the largest in the world, managing a portfolio that spans wind, solar, and hydroelectric power projects across several continents. The newly launched climate fund represents a strategic expansion of this effort, targeting both developed and emerging markets with large-scale decarbonization initiatives.

Mubadala’s participation reflects Abu Dhabi’s increasing investment in global sustainability efforts. Over the past few years, the UAE has been a leading regional force in driving clean energy initiatives, setting ambitious targets for renewable energy adoption. Abu Dhabi’s national strategy, which includes massive investments in solar power and other renewable technologies, aligns with its broader vision of reducing reliance on oil while maintaining its role as a major player in global energy markets.

The UAE’s interest in climate investment is also tied to its diplomatic positioning, particularly ahead of COP28, which it is set to host later this year. The upcoming climate summit is expected to bring together world leaders, climate experts, and business figures to discuss the urgent need for global cooperation on climate action. Brookfield’s collaboration with Mubadala positions both organizations at the center of this international discourse, amplifying their role as key players in the global green transition.

Brookfield’s Chief Executive Officer Bruce Flatt commented on the fund’s successful initial raise, noting that the overwhelming response from institutional investors highlights the urgency of addressing climate risks through private capital. The climate fund, he added, will allow Brookfield to accelerate the development of projects that could have a significant impact on reducing greenhouse gas emissions worldwide.

The fund’s emphasis on infrastructure and industrial decarbonization reflects Brookfield’s broader strategy of focusing on tangible, large-scale solutions to climate challenges. This aligns with the current global trend where institutional investors, corporations, and governments are increasingly shifting resources towards clean energy and low-carbon projects.

As part of its strategy, Brookfield has also signaled its interest in acquiring existing assets in the energy sector and upgrading them to meet modern sustainability standards. This retrofitting process is considered essential for meeting global climate targets, as many of the world’s existing power plants and industrial sites still rely heavily on fossil fuels. By investing in these transitions, Brookfield aims to not only improve the environmental impact of these assets but also ensure that they remain financially viable in a future where carbon emissions are likely to be heavily taxed or regulated.

With its strong ties to government entities and sovereign wealth funds, Brookfield is uniquely positioned to mobilize large amounts of capital for such transformative projects. Mubadala’s $500 million commitment is part of its broader strategy to align with global climate goals while also securing financial returns from the growing green economy. This partnership represents a broader trend in which state-backed entities are increasingly collaborating with private financial institutions to drive global sustainability agendas.

The focus on sustainable investment is not new for Brookfield, which has been active in the renewable energy sector for years. However, this new climate fund represents a significant scaling-up of its efforts, with a sharper focus on decarbonization across industries that are often considered more difficult to transition to green energy, such as heavy manufacturing and transportation. The goal is to find scalable, profitable solutions to some of the most challenging sectors in the climate transition.

As the world inches closer to critical climate tipping points, such initiatives are being closely watched by both the public and private sectors. The sheer scale of capital required to make the transition to a low-carbon economy will necessitate more partnerships like the one between Brookfield and Mubadala. In addition to renewable energy projects, the fund is expected to invest in technologies such as carbon capture and storage, electric vehicle infrastructure, and hydrogen production—sectors that have been identified as key to achieving global climate goals.