November 14, 2024 – Baku, Azerbaijan – The State Oil Fund of the Republic of Azerbaijan (SOFAZ), in collaboration with the International Forum of Sovereign Wealth Funds (IFSWF), successfully hosted a high-level panel discussion titled “The role of sovereign wealth funds in financing the energy transition” as part of the COP29 Presidency events on Finance Day. This significant gathering, held in the Blue Zone, brought together global leaders to examine the strategic role of sovereign wealth funds in advancing sustainable finance and supporting the global shift toward a low-carbon economy.

The event commenced with opening remarks from Obaid Amrane, CEO of Ithmar Capital - Chair of IFSWF, and Israfil Mammadov, CEO of SOFAZ - Deputy Chair of IFSWF, who highlighted the critical importance of sovereign wealth funds in addressing climate imperatives through informed, long-term investment strategies.

"As sovereign wealth funds, we have both the capacity and responsibility to lead by example in mobilizing capital for sustainable development. Our collaboration today at COP29 reflects our shared commitment to financing the energy transition and addressing climate challenges through strategic, long-term investments," stated Obaid Amrane, Chair of IFSWF.

“SOFAZ, as a key contributor to Azerbaijan’s state budget, also plays a pivotal role in financing the nation’s sustainability agenda and energy transition. By upholding robust governance, in line with the Santiago Principles, we are committed to fostering economic stability while driving progress towards a sustainable future,” mentioned Israfil Mammadov, Deputy Chair of IFSWF.

Anne Simpson, Global Head of Sustainability at Franklin Templeton, moderated the session, fostering an in-depth dialogue on the ways sovereign wealth funds can align their portfolios with energy transition objectives while maintaining their financial mandates.

The distinguished panel featured:

• Bo Li, Deputy Managing Director, International Monetary Fund (IMF)

• Guo Xiangjun, Executive Vice President, China Investment Corporation (CIC)

• Derek Rozycki, Head of Responsible Investing, Mubadala Investment Company

• Steve Howard, Vice Chair of Sustainability, Temasek Holdings

• Prasad Gadkari, Executive Director and Chief Strategy Officer, National Investment and Infrastructure Fund (NIIF)

Panelists shared insights on incorporating transition finance within investment frameworks, discussing emissions reduction, asset allocation, geographic focus, and managing risk-return expectations. They addressed key barriers to deploying transition finance at scale, analyzing regulatory, structural, and market challenges, and highlighted solutions like blended finance models to strengthen sustainable investments.

Following the discussion, IFSWF issued a communique reaffirming its commitment to scaling climate finance investments, supporting the decarbonization of member portfolios, and fostering partnerships for sustainable finance. The communique also emphasized the creation of innovative financial instruments, promoting transparency, and advancing a just energy transition, particularly in emerging markets. IFSWF will continue its efforts to mobilize capital for climate action, with future engagements planned for COP30 in Belém, Brazil, and upcoming UN Climate Change Conferences.

This session, as one of the COP29 Presidency events, underscored the unique role of sovereign wealth funds in supporting the global climate agenda. SOFAZ and IFSWF, through this platform, reinforced the potential of sovereign wealth funds to shape a resilient, sustainable future through collaboration and responsible investment.