July 1 - July 5, 2024

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In this week's issue: $4.8 billion across 23 deals in Transition Finance ($4.3 billion), Nature-based Solutions ($124 million) Hard-to-Abate Sectors ($5 million), and the Blue Economy ($412 million).

10 Essential Deals and Commitments:

Transition Finance

• The World Bank provides $1.5 billion for renewable infrastructure in India
• The Dominican Republic completes a $750 million Green Bond
• Turkish snack maker Ülker raises a $550 million green bond aimed at tackling emissions across scopes 1,2 and 3
• Seaya raises $325 million for Andromeda Climate Tech fund

Nature-based Solutions

• DFC invests $50 million in BTG Pactual TIG’s Latin America Strategy
• Natcap raises $10 million to expand nature risk management software
• Genica raises $12 million for biological pest control and soil health tech

Hard-to-Abate Emissions

• MIG Capital invests $2.5 million in GlassPoint's solar-to-heat technology

Blue Economy

• The EIB signs $395 million blended finance deal to support Tanzanian blue economy enterprises
• The EIF invests $22 million in Hatch Blue’s Blue Revolution Fund

News Highlights

Policy and Regulation

• Austria and France publish new carbon management strategies
• World Bank receives a higher rating from Fitch for climate-resilient debt clauses
• UNEP and Brazil sign a new memorandum on environmental policy enforcement

Climate & NbS Finance

• Emerging research from UNEP found private financing for nature surged to over $102 billion in 2023
• World Climate Foundation leads the launch of a new Nature Investment Coalition
• BlackRock announces new guidelines for climate-aligned investments

Emerging Science

• One Earth study finds that 40% of land in Amazonian countries may already be under some form of conservation.
• A study by Development Initiatives finds climate finance label is often being incorrectly applied in international development contexts
• Current Biology paper finds that protected areas generally have no negative impact on local economic growth, especially when local communities are engaged in planning

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Nature-based Solutions ≥ $1M

Commitments and deals

Commitments

Vietnam estimates $2.7 billion needed for sustainable rice project [vietnamnet]

• Vietnam has estimated that it will need to invest $2.7 billion to implement a World Bank-supported 1 million-hectare high-quality, low-emission rice production project. The World Bank has already committed to providing loans and technical support for the project, and the Vietnamese government's contribution will be submitted for consideration in the third quarter of 2024.

Deals

DFC invests $50 million in BTG Pactual TIG's Latin America strategy [businesswire]

• The U.S International Development Finance Corporation (DFC) has announced a $50 million catalytic commitment to the BTG Pactual Timberland Investment Group's Latin American reforestation strategy. The loan structure provides additional benefits to TIG if the strategy meets biodiversity and water outcome KPIs as the company works to protect 135,000 hectares of natural forests.

NFWF releases $33.5 million to protect longleaf pine ecosystems [NFWF]

• The National Fish And Wildlife Foundation has announced $33.5 million in conservation grants from the Longleaf Landscape Stewardship Fund focusing on protecting and restoring longleaf pine forests in eight southern states. The investment spans 30 projects and focuses on engaging landowners to enhance the protection and restoration of longleaf pine projects. The grants aim to establish an additional 70,000 acres of longleaf pine habitat and maintain an additional 430,00 through prescribed burnings, while also addressing seedling bottlenecks and providing technical assistance to landowners.

Genica raises $12 million for soil health tech [ag funder news]

• Genica, an agricultural biological products company based in Brazil, has raised R$68 million ($12 million) in a round led by Mitsubishi's Agrex group. The funding will help the company expand its product line of biologically based agricultural chemicals, including fungicides, bio-stimulants, bio-inoculants, and bio-pesticides, to provide agricultural benefits and reduce impacts on biodiversity.

Natcap raises $10 million [esg today]

• Natural Capital Research (Natcap), a nature and biodiversity intelligence company, has raised $10 million in a series A funding round. The organization, which was spun out of Oxford University, provides technology to help companies monitor nature-related risks and nature data surrounding their company operations. The company is eyeing compliance with new regulatory and voluntary standards for nature risk and impact reporting as a source of growth for their data offerings.

eAgronom secures $10.8 million to strengthen carbon program and farmer incentives [arctic startup]

• Estonian soil carbon sequestration company eAgronom has raised €10 million ($10.8 million) in 2023 and 2024 for a series A2 equity round.. The funding is expected to be used to support the market expansion of the company, which works with farmers to implement projects that sequester carbon in the soil.

Nigeria invests $8.5 million in forest restoration [the national]

• The Nigerian federal government has approved a $8.5 million investment in afforestation and degraded forest restoration. The funds will go to help construct shelter belts and complement wider initiatives like the Great Green Wall Pan African Program.

Transition Finance ≥ $100M

Commitments and deals

Commitments

Egypt secures $33 billion in green ammonia projects from EU Investment Conference [the media line]

• Egyptian green ammonia developers have secured four agreements totaling $33 billion at the 2-day Egypt-EU Investment Conference in Cairo, a major infusion into the country's sovereign fund. The deals included $11 billion with Germany's DAI Infrastruktur GmbH, a $4.25 billion agreement with India's Ocior Energy, a $3.46 billion agreement involving Egypt's TAQA Arabia and France's Voltalia, and a $14 billion agreement with a consortium including Britain's BP, UAE's Masdar, Egypt's Hassan Allam Utilities, and Infinity Power.

CalPERS expands climate transition efforts by $10 billion [calpers]

• CalPERS has taken a suite of actions aimed at increasing its investment in the global energy transition, including private market investments and a public equity index, totaling $9.7 billion. The investments are part of a plan to invest $100 billion in climate solutions by the end of 2030. The main actions taken include: a customized Climate Transition Index; committing $5 billion in public equity investments to a scalable alternative to capitalization-weighting, which will evaluate both the risks and opportunities of the global energy transition; 9 commitments totaling $1.1 billion in private market investments; and $3.6 billion private market investments currently under review.

Pertamina to invest $6.2 billion in green energy [the investor]

• Pertamina, the Indonesian state-owned oil and gas company, has announced investments of $6.2 billion over the next five years in renewable energy through its Pertamina New & Renewable Energy (NRE) subsidiary. A portion of the investment will be used to expand the company's low-carbon electricity generation capacity to 6 GW from 2.6 GW, with other funds going to the goal of producing 7,000 tons of clean hydrogen a year by 2029.

Deals

World Bank plans $1.5 billion in Indian green hydrogen and renewable investments [carbon herald]

• The World Bank has provided $1.5 billion in loans to India to promote hydrogen and renewable infrastructure throughout the country. The funds are expected to be used to support capacity-building reforms in India's grid and energy system.

Biden administration announces regional technology hubs [white house]

• The Biden Administration has released $504 million in funding across 12 tech hubs focused on innovation in clean energy, as well as biotechnology, AI, and other fields. The investments include $21 million in awards for lithium recycling in Nevada, $45 million for grid resilience in South Carolina, $19 million for climate tech development in Florida, and $51 million for sustainable polymers in Ohio.

Nuveen holds first close of PE climate strategy with $200 million [esg investor] [esg today]

• Nuveen has invested $200 million in the first close of its second global climate inclusion private equity strategy. The fund will focus on climate inclusion in global growth markets, targeting investments that mitigate climate change, build climate resilience, and provide access to basic financial services for low-income consumers.

FIBRA Macquarie Mexico closes $150 million sustainability-linked unsecured credit facility with IFC [businesswire]

• Fibra Macquarie Mexico has closed a $150 million sustainability-linked unsecured credit facility with IFC as part of its strategy of diversifying its funding sources. The funds will be used to support sustainability initiatives including green building performance, and finance the company's growth capex program. The loan is IFC's first debt commitment to a Mexican FIBRA.

Iberdrola acquires Balantia [esg today]

• Iberdrola has acquired an 80% stake in Balantia, a decarbonization planning technology company. Iberdrola had previously invested in Balantia's start-up program Perseo in 2019. Following the acquisition, the companies will launch the Net Zero Emissions Manager platform , which aims to help enterprises design custom decarbonization plans.

Fund Formation

Seaya raises $321 million [esgtoday]

• Seaya has raised €300 million ($321 million) for the Andromeda climate tech fund, which focuses on impact-driven investment across energy transition, decarbonization, food value chain, and circular economy initiatives. The formation almost doubles the total AUM of Seaya to over $702 million. The fund aims to make 25 investments by the end of 2027 and has already made 5 investments.

The Westly Group closes $100 million seed climate fund [the westly group]

• The Westly Group has closed a $100 million seed fund focused on the energy, mobility, building, and industrial sectors. The fund has already invested in Condoit, an electrical infrastructure data platform; Sightline, the market intelligence company behind CTVC; and Diagon, a supply chain software company.

Carbon Equity raises $64 million for new fund [impact investor]

• Carbon Equity, an Amsterdam-based investment platform focused on private market climate investment, has held the first close of its third climate tech fund for €60 million ($64 million). The fund is considering lowering its minimum investment requirement to $54,000 to increase opportunities for participation.

Green Bonds ≥ $100M

Commitments and deals

Completed Issuances

The Dominican Republic issues a $750 million, 6 time oversubscribed, green bond [world bank]

• The Dominican Republic has successfully issued an inaugural 12-year, $750 million green bond with an annual coupon of 6.6%, 15 basis points lower than its conventional bonds. The transaction was 6x oversubscribed and will provide funding for clean urban public transport,  tax incentives for renewable energy development,  efficient wastewater systems, and protection and management of natural resources under the Dominican Republic 30x30 Program.

Ülker issues a $550 million green bond [environmental finance]

• Ülker, a Turkish food products company, has raised $550 million from a debut sustainability-linked bond, which was almost 3 times oversubscribed, with a final coupon of 7.875%. The bond will help the company meet its goal of reducing absolute Scope 1 and 2 emissions by 42% by 2030, and Scope 3 emissions by 30% by the same date.

Natura & Co Holding SA issues a $244 million in green bonds [bloomberg]

• Brazilian beauty product group Natura & Co Holding SA has sold 1.33 billion reais ($244 million) in local green bonds, with 40% of the issuance taken up by development banks, including IDB Invest and the IFC. The bond commit Natura to increase the number of ingredients sourced from the amazon to 47 by 2026 and 49 by 2029. The companies Amazonian operations are pared with rainforest conservation, and provide economic benefits to 10,00 hectares across 2.2 million hectares, according to the company. The bonds were sold at a spread of 120 basis points over the CDI benchmark, 25% less than the company’s average for similar instruments.

Hard to Abate Sectors ≥ $1M

Commitments and deals

Commitments

CICE launches $7.3 million in funding for hard-to-abate projects focused on green energy [canadian manufacturing]

• The British Columbia Centre for Innovation and Clean Energy (CICE) is presenting a July 2024 call for low-carbon technology investments, including low-carbon hydrogen, battery technology and energy storage, and low-carbon and synthetic fuels. The applications will be open from July 10th to August 1st, 2024 with CAD10 million ($7.3 million) available.

Deals

Zero Carbon Capital leads $2.8 million round for recycled concrete business [environmental finance]

• Zero Carbon will invest $2.8 million in Cambridge Electric Cement's recycled concrete business. The investment will aid the company's plans to industrialize production at its Cardiff-based facility and build offtake agreements.

MIG Capital invests $2.5 million in solar to steam company GlassPoint [tech]

• MIG Capital, a German VC firm, has invested $2.5 million in GlassPoint, a solar thermal system technology developer. The funding extends the company's Series A financing round and will help GlassPoint expand its engineering, commercial, and operations initiatives and develop a solar heat plant in Saudi Arabia.

American Airlines signs a deal for 100 hydrogen-powered engines [esg today]

• American Airlines has entered into a conditional purchase agreement with ZeroAvia for 100 zero-emissions hydrogen-electric engines, which use hydrogen fuel cells for power and produce water vapor as a waste product. The cost of the engines was undisclosed. ZeroAvia expects to have engines available for a 700-mile range in 40-80 seat aircraft by 2027.

Blue Economy ≥ $1M

Commitments and deals

Commitments

EIB signs $395 million blended finance agreement for Tanzanian women's employment and Blue Economy [eeas]

• The European Investment Bank has signed a statement of intent to provide €15 million ($16 million) in grants, and €350 million ($379 million) in loans to support small and medium enterprises focused on the blue economy and women's employment opportunities in Tanzania. The loans will support local Tanzanian banks' lending capabilities to support blue economy projects.

Benin launches $36.4 million sustainable aquaculture project [seafood source]

• Benin and the African Development Bank have launched a $36.4 million sustainable aquaculture project, entitled the Project to Promote Aquaculture and the Competitiveness of Fisheries Value Chains (PROMAC). The project aims to sustainably produce 65 million fish and 30,000 metric tons of fish feed per year, and help close the 60% gap between Benin’s demand for fish and current supply.

European Investment Fund provides $21.65 million to Blue Revolution Fund [efa news]

• The European Investment Fund (EIF) has invested €20 million ($21.65 million) in the Blue Revolution Fund, a venture capital fund focused on early-stage aquaculture businesses. The fund, which is managed by Hatch Blue, aims to use the capital to address market gaps in the aquaculture sector and introduce sustainable technologies and alternative seafood protein solutions.

Research and Knowledge Sharing

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Policy and Regulations

World Bank and other development banks get ratings boosts based on climate clauses [reuters]

• Fitch has declared that debt payment freezes for climate-disaster hit countries would not damage the credit rating of the World Bank and other top banks, a major boost for Climate Resilient Debt Clauses which allow for deferred repayments after climate disasters. The rating agency has also changed its approach to hybrid bonds with lower capital buffer requirements by no longer capping them at an A grade.

Loss and Damage Fund releases technical discussion paper [loss and damage collaboration]

• The Loss and Damage Collaboration has released Let’s Get To Work, The Loss and Damage Fund in 2024: A Technical Discussion Paper, with recommendations on how the loss and damage fund can effectively support climate vulnerable countries and avoid delays. The report provides an outline of the history of the fund’s formation, a timeline of the development and implementation of the fund, an agenda for the Fund’s 2nd meeting on July 12th, and guidelines for how developed countries can meet their commitments to provide finance to developing countries, including through a potential Climate Damages Tax, among other financial instruments.

UNEP and Brazil sign enforcement agreement [unep]

• The United Nations Environment Programme and the Ministry of Environment and Climate Change (MMA) of Brazil have signed a strategic memorandum outlining cooperation on enforcing environmental regulations. The memorandum outlines how UNEP will support Brazil in action on climate, nature, mitigation of chemical pollution, and strengthening environmental governance.

France and Austria release carbon management strategies [catf]

• France has published a new Carbon Capture, Utilization, and Storage (CCUS) strategy aiming to help both countries manage their carbon emissions. France's strategy includes an initial ambition to capture 4-8 million tonnes of CO2 a year by 2030 and 30-50 million tonnes a year by 2050, and the development of a regulatory framework for carbon capture. Austria has also published a new Carbon Management Strategy includes a recommendation to allow geological CO2 storage in the country, and new legal frameworks for carbon capture and management.

Finance Research and Updates

Wood Mackenzie estimates $196 billion needed in CCUS by 2034 [energy-pedia]

• A new report from Wood Mackenzie entitled 'CCUS: 10-year market forecast' finds that industries will need up to 640 Million tonnes per annum (Mtpa) of carbon capture capacity by 2034 as they look to decarbonize, but the projects expected to come into operation fall around 200 Mtpa short of that, at 440 Mtpa. The report found that 70% of the investment will be in North America and Europe across the value chain, and will likely require $196 billion in total investment. The study found that the lack of focus on CCUS in high-emitting emerging markets represented a potential stumbling point in advancing capacity.

Private financing for nature surges to over $102 billion yearly [unep]

• In June 2024, the United Nations Environment Programme Finance Initiative released findings that yearly private finance for nature had grown $9.4 billion in 4 years to reach $102 billion yearly in 2023, estimating that $1.45 trillion could flow into nature finance by 2030, at current rates. The announcement was based on research presented at UNEP FI's new green shoots event at the 3rd World Biodiversity Forum in Davos.

CBI will not sign off on Japan's next transition bond [responsible investor]

• The Climate Bonds Initiative has announced it will not sign off on Japan's upcoming $2.2 billion climate transition bond issuance, which has been scheduled for July 2024. Sean Kidney, the Chief executive, said that the allocation of proceeds towards a new carbon pricing arm of the government is not accessible within the current criteria of the CBI, but that they may certify similar bonds in the future.

BlackRock lays out details on climate alignment for $150 billion in funds [Net Zero Investor]

• Black Rock has announced it will overhaul its voting policies for funds with climate objectives. The new guidelines apply to 83 Europe-domiciled funds representing around $150 billion. The new stewardship approach will pursue a stronger emphasis on Paris alignment.

VCs invested $17.7 billion in carbon and emissions technology in 2024 so far [esg news]

• Research led by PitchBook's Institutional Research Group has found that carbon emissions technology secured $17.7 billion in venture capital investments. VCs invested across 1,133 deals in 2024 so far, and the report found surprising market resilience, with pre-money valuations remaining stable, varying between $13.6-$15 million from 2021-2023, and Q1 2024 median deal size around $4.2 million. VC Deal value for Q1 2024 was at $2.7 billion, the lowest quarterly value since 2021. The report also contained an analysis of climate technology sector segmentation, top investors, and exit activity.

SBTI CEO quits amid offsetting row [sustainability / beat]

• Luiz Amaral, SBTI's CEO, has announced he will resign amid the continuing controversy regarding the group's approach to carbon offsets. The departure came after pushback from staff to SBTI's decision to provisionally allow carbon offsets in target-setting plans, which was later walked back.

Nature Investment Coalition launches [ipe]

• The World Climate Foundation has led the launch of the Nature Investment Coalition (NIC), a global coalition focused on bridging the gaps in nature-based solutions financing needs. The new coalition builds on the Climate Investment Coalition (CIC), which has facilitated €120 billion ($130 billion) in commitments from 42 pension funds. The CIC also announced further expansion at the launch. The NIC has announced goals of mobilizing tens of billions in commitments from the private sector for nature-based investments by 2030.

Finance for Biodiversity updates guidance [sustainable views]

• The Finance for Biodiversity Foundation has announced new guidelines for investors who want to set targets on biodiversity impact. The framework guides how investors can halt and reverse biodiversity loss within portfolios of listed equities and corporate bonds, and delineates between priority sectors and types of targets.

Jurisdictional REDD+ credits reached a price of $15 in 2028 [edf]

• The EDF and MSCI Carbon Markets have released a new report entitled “Navigating Jurisdictional REDD+: A Pricing Guide for Tropical Forest Nations”, which finds that jurisdictional REDD + carbon credit prices could rise significantly by 2028, based on an analysis of price action of jurisdictional REDD+ credits. The analysis estimated that 300 million metric tons of forest carbon credits from REDD+ programs could come from the ART-TREES pipeline by 2030, 6 times the current demand.

SBTi finds doubling of net zero targets in 2023 [edie]

• The SBTi Monitoring Report 2023 has found a 102% increase in companies setting science-based targets in 2023 compared to all previous years. The study found a total of 449 corporates set targets in line with SBTi's Net-Zero Standard, which was a 245% increase on 2022 figures. The highest growth in companies setting standards was in India, with 78 companies setting new science-based targets.

Emerging Science

Development Initiatives study highlights the use of the term "climate finance" for non-climate development finance [devex]

• A new study by Development Initiatives finds that the climate finance label is often being incorrectly applied or applied to existing funding to meet climate finance goals. The study highlighted a lack of consistency over time and between estimates, with much of the recent cited increase in funding potentially coming from reporting changes or new screening of funding for climate impact. The study suggests that new common definitions are needed to ensure consistency going forward.

A study in One Earth finds more than 40% of Amazon states currently conserved [mongabay]

• A new study in One Earth finds that 40% of land across 9 Amazonian countries may be under some form of conservation management, higher than the 28% reported officially. This figure includes other non-Amazon biomes and found that in the Amazon rainforest itself, 62.44% of the land is under some form of conservation. The study emphasized that indigenous territories, which covered 16% of the total land area across the 9 countries, were  important for  conservation management, and that their recognition could further support the expansion of protected areas.

A new paper in Current Biology finds that protected areas have no negative effect on local economies overall [mongabay]

• A new paper in Current Biology analyzes the effect of protected areas on biodiversity protection and economic growth and finds that overall PAs do not seem to hurt local economic development. However, in some countries, protected areas could have a detrimental effect on local economies, especially in developing economies where local buy-in is limited.

Paper discusses how to meet biodiversity targets in blue carbon ecosystems [nature] [pdf]

• A new study in Nature Reviews Earth & Environment attempts to translate the Kunming-Montreal Global Biodiversity Framework targets for blue carbon ecosystems into quantitative metrics. The study found that net mangrove, saltmarsh, and seagrass losses of 187–190 km2, 76–126 km2, and 3,068–3,597 km2, respectively, must be avoided annually from 2030 onwards, and that 23,693–24,369 km2, 10,467–17,296 km2 and 90,601–106,215 km2 of these ecosystems, respectively, must be restored to achieve the GBF targets.

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