January 29 to February 2, 2024
Your Newsletter at a Glance
Commentary by C4C
Generate Capital closes $1.5 billion raise. GEF to invest $1 billion over the course of 2024 in nature. AIMCO creates a $1 billion decarbonization fund. Greencoat Energy acquires 513.5MWP in energy generation in a $896 million deal. Stafford raises $635 million for sustainable timberland investments. Mirova Raises $282 million fund focus on clean energy in emerging markets. Watershed raises $100 million to enhance its corporate climate management software. Invesco invests $95 million in takeover of Restoration Forest Products. Cultivo secures $14 million in its latest round, Blue Layer raises $10 million, Grow Indigo $8 million, and more.
Policy and Regulation
- Developed nations miss deadline for Loss and Damage Fund board appointments
- Biden administration announces major green industrial capacity building investments through National Science Foundation
Climate and NBS Finance
- Climate tech received 1/3rd of all investment in African startups in 2023
- Carbon credit insurance company Carbon Pool launches in Switzerland
- Brazil’s Amazon Fund received $640 million in funding in 2023
- Chinese catastrophe bonds expected to grow in 2024
- Bregal Sphere launches new nature investment division
Science and Research
Analysis Spotlight: Bela Hanratty at Climate (Pod)Notes put out an incisive recap of the findings of BNEF’s Energy Investment Trends Report and Nat Bullard’s annual presentation on the transition last week. He’s pulled out a few key insights: "To be compatible with BNEF’s Net Zero Scenario, investment needs to be 2.75x what it is currently. And, that doesn’t actually represent that much of an acceleration. If we just replicate last year's growth of 17%, we get to an average of 2x over the rest of the decade. If we take the compounded growth over the last three years (24%), we’re pretty much there."
While the trend is encouraging, to slow the global warming train, equivalent ramp ups in investment will need to be seen in industrial decarbonization, Nature-based-Solutions, and climate smart agriculture.
Further notes from the article:
- While renewable generation continues to grow at double digits, it is mostly just covering rising demand, not cutting into total fossil fuel demand, which continues to rise.
- Investment in fossil fuel supply still outstrips clean energy investment by around 7%, totaling around $1.875 billion in 2023
- 2 and 3 wheeler EV’s made up the bulk of fossil vehicle demand displacement, buoyed by emerging market demand
C4C News and Events
Learn more about what we're doing
Capital for Climate will be holding our 3rd virtual NbS Roadshow on Thursday, February 8th, featuring seven Brazilian funds and investment vehicles with solutions for combating deforestation and habitat conversion.
The funds presenting are BTG Pactual Timberland Investment Group, The Responsible Commodities Facility, The Amazon Reforestation Fund, MOV Investimentos, Global Forest Bond, Reverte Program and JGP Crédito.
This educational event is for accredited and institutional investors only. If you are interested in learning more, you can register via this registration page or email Matt Portman, Roadshow Manager at mportman@capitalforclimate.com to request further information.
Climate Finance ≥ $100M
Commitments and deals
Commitments
UK aims to raise $3.2 billion green bond [Environmental Finance]
- The UK has announced it will auction £2.5 billion ($3.2 billion) in sovereign green bonds during the 2nd week of February, marking its first green bond tap of 2024.
Volkswagen to invest 1.8 billion in Brazilian hybrid and electric production [Reuters]
- Volkswagen has confirmed a plan to invest 9 billion Reais ($1.83 billion) in Brazilian production, including its hybrid and electric division, doubling its investment plan to 16 billion Reais. The investment is a boost for President Lula's industrial policy, which focuses extensively on vehicle production.
AIMC to create $1 billion fund for decarbonization efforts
- The Alberta Investment Management Corp is developing a CAD1 billion ($750 million) fund for investment in energy transition and decarbonization efforts. The Fund is targeted to industrial decarbonization, carbon capture, sustainable fuels, and renewable energy production. AIMC does not intend to divest from fossil fuel investments and other high carbon assets, despite the new green investing focus.
- The U.S federal government has announced a $150 million investment in 10 regional National Science Foundation Innovation Engines, with $365 support from other partners, which will be eligible to receive further grants reaching upwards of $2 billion by the end of the decade. These investments include major climate solutions projects, including the
- Great Lakes Water Innovation Engine,
- Louisiana Energy transition Engine,
- North Dakota Advanced Agriculture Technology Engine,
- Colorado-Wyoming Climate Resilience Engine,
- Southwest Sustainability Innovation Engine, and
- Upstate New York Energy Storage Engine
Virscent Ventures launches new $130 M fund targeting Asia-Pacific Climate Tech Finance [Afr]
- Australian firm Virescent Ventures has announced plans to develop a $130 million fund focusing on climate tech and multi-sector decarbonization throughout Asia, complementing their first fund, which raised AUD260 million over the past 3 years.
Deals
Generate Capital closes $1.5 billion fund [Businesswire]
- Sustainable infrastructure platform Generate Capital closed its most recent capital raise at $1.5 billion in commitments. Generate has now raised over $10 billion in funding since 2014. The funding will be focused on sustainable infrastructure investments across power, mobility, water, waste and urban infrastructure. Generate also announced an ongoing partnership with The California State Teachers Retirement Systems.
Greencoat energy purchases largest UK solar farm in $896 million deal[pv-tech]
- Greencoat energy has finalized a deal to acquire 53 solar farms from Toucan energy, representing 513.5MWp across England, Wales and Northern Ireland. The acquisition deal was supported with major investments from local pension authorities.
Mirova Raises $282 million for fund focused on clean energy in emerging markets [ESGtoday]
- Mirova has received $282 million in commitments to the Mirova Gigaton fund, reaching half of the fund's $500 million target a year after launch. The fund intends to provide medium and long term debt financing for clean energy projects, primarily in Africa, Latin America, the Middle East and Asia. The fund hopes to use strategic investments to mobilize institutional investors, with a focus on SMEs, solar systems from home to industrial and mini-grid scale, climate smart food systems, and carbon credit pre-financing.
Future Energy Ventures raises $119 million for initial fund [Environmental Finance]
- Future Energy Ventures has received €110 million in investment following launch, with a target cap of €250 million. The fund has been jump started by the European Investment Fund and E.ON, both of whom are holding mid double digit million investments. The fund plans to invest in decarbonization across 30 projects throughout Europes, North America and the Middle East, with ticket sizes of €1-10 million.
Watershed raises $100 million for climate software [reuters] [esgtoday] [watershed]
- Watershed has finalized a $100 million series C investment, led by Greenoaks and with investment from Kleiner Perkins, Sequoia, and other previous stakeholders. The company has reached a valuation of $1.8 billion as a result. The new investment will fund the expansion into Europe and improvement of its emissions measurement, reporting, and decarbonization solutions software.
Nature-based Solutions ≥ $1M
Commitments and deals
Commitments
GEF considering more than $1 billion in nature funding deals for 2024 [GEF]
- The Global Environment Facility is considering more than $1 billion in investments in climate adaptation, biodiversity conservation, ocean health, and pollution reduction in 2024. The planned investments will cover 77 countries and aim to mobilize $8.90 for every dollar spent.
Deals
Stafford raises $635 Million for timberland fund [Environmental Finance]
- Stafford raised $635 million towards a $1 billion final close target for its 10th timberland investment fund, which is classified as a social and environmental fund under the EU's SFDR Article 8. The fund is acquiring secondary positions in funds focused on afforestation, natural forest reforestation, and carbon sequestration, with $160 million invested so far.
Tropical Asia Forestry Fund raises $130 million, under target [FS Sustainability]
- The Tropical Asia Forest Fund 2 (TAFF2) has raised $130 million towards its $300 million goal from investors including Mitsui, Nomura, the ADB and the Australian government, representing a significant shortfall from expected investment. The close ended fund is designed to help improve sustainable practices in Asian timber harvesting as the region increases its share of global timber production.
Inari raises $103 million for gene edited seed technology[Prn-media]
- The seed gene editing startup Inari has announced a raise of $103 million to fund the commercialization of its gene editing technology. The company hopes to utilize gene edited seeds to reduce the need for chemical inputs in agriculture.
- The Arizona based sustainable logging company Restoration Forest Products has taken the next step in its chapter 11 bankruptcy, securing $95 million from Invesco, who will take over the company as majority owner alongside Lateral Investment Management. RFOR's business model revolves around logging to reduce wildfire risk and speed ecological restoration, and its partnership and operations with the US Forest Service has continued despite the bankruptcy.
Canada invests $49 million in 44 indigenous-led conservation projects [Cision]
- Canada has announced additional funding for Indigenous led ecological conservation and restoration projects, with CAD66 million split between 42 projects. The Indigenous-Led Area-Based Conservation Initiative is spread throughout Canada, including land protection projects with the Mainland Mi'kmaq in Nova Scotia, Caribou range enhancement with the Abitibiwinni in Quebec and Ontario, and cultural and ecological land conservation in Saskatchewan with the Meadow Lake Tribal Council. The Investment brings the total funding for the ILABCI project to $202 million spread across 94 communities.
Cultivo receives $14 M for natural capital platform [Forbes]
- Cultivo has raised $14 million primarily from Mass-Mutual Ventures and Octopus Energy Generation with the funds earmarked for further building out a pipeline of NbS carbon removal projects. The company will also invest in further rolling out its AI enabled science and technology platform, which monitors project success.
Blue Layer raises $10 million for carbon project development [Carboncredits.com]
- Blue Layer, a startup focused on assisting carbon project developers who want to pair with companies making net-zero commitments, has raised $10 million to support its expansion. The company enables data recording and display for project developers, and is currently engaging with over 200 carbon project developers and other industry players.
Grow Indigo raises 8 million for Indian sustainable agriculture and carbon farming
- Grow Indigo, an Indian sustainable agriculture company and joint venture between Indigo Ag and Mahyco, has raised Indian Rupees 670 million ($8 million) in its most recent funding round, totaling $23 million to date. The company intends to use this funding to expand its carbon farming platform further.
- Canada will provide CAD 8 million ($5.95 million) to support nature based solutions focused on climate adaptation in the Philippines, alongside plans for the 2 countries to work together on transition mineral development.
Aquaculture tech startup Aquaconnect receives $4 million in pre-series B funding [Outlook India]
- Aquaconnect, a Tamil Nadu based startup which uses satellite imaging to assist aquaculture projects, has raised $4 million in its most recent round.
Research and Knowledge Sharing
Grow your climate finance expertise
Finance Research and Updates
- Bloomberg NEF has released its annual Energy Transition Investment Trends Report, finding that $1.8 trillion was invested in the clean and renewable energy sector. These findings are corroborated and expanded in Nat Bullard’s outstanding annual presentation, and a summary by Bela Hanratty of Keeling Capital. Despite this high rate of growth, fossil fuel consumption continues to rise, and BNEF estimates $4.8 trillion will need to be spent every year by the end of 2030. The good news: If investment growth continues at the current rate, the capital gap could be filled.
A third of African startup funding went to climate tech in 2023: Deal Tracker Africa [TechCabal]
- Deal Tracker Africa has found that, while venture investment in African tech startups fell 46% from 2022 to only $3.5 billion in 2024, over one $1.2 billion was invested in African climate tech startups in 2023, representing only a 22% decline and bringing the share of investment to a third of tech dollars invested on the continent.
Asian Development Bank records $9.8 billion in climate finance transactions in 2023 [businesstimes]
- The Asian development bank committed $9.8 billion in climate finance transactions in 2023, a 46 percent increase from 2022. $5.5 billion was committed to mitigate greenhouse gas emissions, while $4.3 billion was for climate adaptation.
Bregal Sphere nature investments launches [Businesswire]
- Bregal Sphere has launched a dedicated natural capital strategy, headed by Agustin Silvani, former head of Conservation Finance at Conservation International, and Alvar de Wolff, a Bregal managing partner.
Investors withdraw activist petition but Exxonmobil continues to sue [Reuters]
- ExxonMobil has announced intentions to continue suing the activist investor group who filed a motion for the company to act on its scope 3 emissions using the suit to try and block future similar motions.
Amazon Fund received $640 million in 2023 [Reuters]
- Brazil's Amazon Fund for Sustainable Development received $640 million in pledged donations in 2023, and currently has $610 million available after major investment from the U.S and other major economies since the start of the Lula administration.
Catastrophe bonds grow in China in response to climate related disasters [SCMP]
- Chinese investors expect catastrophe bonds, which help to share risk related to climate disasters, to become increasingly common in 2024, due to China's lag in insurance protection and the growth of Hong Kong as a catastrophe bond hub.
Policy and Regulatory Changes
SBTI forms target validation subsidiary [Edie]
- As part of continued reforms surrounding its independence from CDP, and in response to an almost 100% YoY increase in corporate commitments, the Science Based Targets Initiative has established a new target validation subsidiary. The subsidiary aims to cut average waiting times for corporate target validation from 24 months to twelve.
Developed nations miss deadline to pick loss and damage commission members [climate change news]
- The first convening of the new loss and damage funds board of governors has been delayed, as developed nations are still debating who to appoint as their fund governors. The main point of contention seems to be if major economies that have invested more in the fund, such as the EU, should have more seats. Small island developing states and others have raised concerns that delays will limit their ability to cope with escalating climate disasters.
UNEP FI Calls for streamlining of nature reporting [environmental-finance]
- The UN Environment Programme Finance Initiative's new Accountability for Nature report has called for the alignment and streamlining of nature reporting across all jurisdictions. The report suggests building on existing voluntary initiatives such as the TNFD and potential ISSB nature reporting framework.
Ukraine announces pilot of Emissions Trading System in 2025 [Ukraine GOVT]
- The Ukrainian Government has announced it will launch a pilot emissions trading system in 2025, which it hopes will help ease integration with the EU's Carbon Border Adjustment Mechanism.
- The Moroccan central bank has announced that it will increase its investment in green, social and sustainable bonds from 7% to 10% of its foreign exchange reserves. The investment comes as Morocco faces major climate challenges.
Emerging Science
Energy Justice Index released [phys.org]
- A new study from the Research Institute for Sustainability maps a standardized, quantitative comparison of energy transition processes in the Global South, and the steps that might be needed to achieve energy justice across jurisdictions
- The Carbon footprint of urban farming is 6x greater than rural farms, according to a new study from the University of Michigan. This discrepancy is largely due to the infrastructure required for farm construction and maintenance, short lifetime of urban farms, and lower yield per acre.
- A study by the Indian Institute of technology suggests that global warming has reduced the carbon uptake potential of Indian forests by 6% over the past 2 decades. The study found that warming was associated with declining carbon uptake rates in forests throughout the country, which may complicate the country's efforts to offset emissions through greening.
What’s new in climate investment?
More News
.png)
