Danish investment firm Copenhagen Infrastructure Partners is looking to raise $3 billion for a new fund focused on building renewable energy projects from scratch in emerging and middle-income countries, the heads of the fund told Reuters.

The 14-year Growth Markets Fund II it has just launched will target wind and solar power and niche investments such as battery storage and projects that turn electricity into carbon-neutral synthetic fuels, so-called ‘power-to-X’.

According to data firm Preqin, only one emerging markets greenfield renewables fund has raised more than Copenhagen wants to amass, although the 2014 $3.26 billion Guangzhou City Development Industry Fund is focused on China.

Getting more money to developing economies to help them transition to a low-carbon future is a central aim of the COP28 climate talks in Dubai, but most climate-focused funds have targeted safer, more reliable returns in developed countries.

While a deal to phase out fossil fuels has been hard to agree, more than 60 countries have backed a global agreement to triple renewable energy this decade.

Most of the world’s future emissions will likely come from emerging and middle-income countries. They will need $2.8 trillion in investment by 2030 to meet cleaner energy goals, including at least tripling renewable capacity, Copenhagen partner and co-head of the fund Niels Holst said.

“The key driver in these countries is that they need power. The growth in demand for electricity is enormous,” he told Reuters, adding that renewable energy was often the cheapest energy source.

Yet financing is far short of what’s needed, with investors deterred by the risks involved.

Only $550 million has been raised this year for funds focused on renewable energy projects in developing countries, against more than $1 billion last year and nearly $8 billion in 2020, Preqin data showed.

Rising inflation and interest rates have hit cleaner energy project returns in developed markets, including Britain and the US.