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In this week's issue: $5.4 billion across 26 deals in Transition Finance ($4.2 billion), Nature-based Solutions ($1 billion), Hard to Abate Industries ($56 million), Carbon Removal ($81 million), and the Blue Economy ($85 million).

10 Essential Deals and Commitments:

Transition Finance

• Brazil releases $2 billion in green bonds in second issuance
• Adani Group pledges to invest $100 billion in transition infrastructure
• Canada’s University Pension Plan sets $870 million climate finance target
• DOE announces $900 million in available support for SMR nuclear

Nature-based Solutions

• GEF approves $736.4 million in nature and climate spending
• Iberdrola launches Carbon2Nature program project in Spain
• BTG Pactual Timberland Investment Group to sell Microsoft 8 million carbon credits

Hard-to-Abate Emissions

• Low-carbon cement company Materrup raises $27.8 million in latest funding round

Carbon Removal

• Uzbekistan becomes first country to receive World Bank carbon credit payments with $7.5 million infusion

Blue Economy

• Australia invests $19 million in reef restoration

News Highlights

Policy and Regulation

• EU Council approves Nature Restoration Law after surprise shift from Austria
• Australian state and federal governments agree on biodiversity strategy
• New European ESG fund rules could result in name changes for 2/3rds of funds or divestments of $40 billion

Climate & NbS Finance

• Republican-represented districts have received the bulk of IRA funds, Bloomberg finds
• Carbon Pulse finds biodiversity monitoring startups are having trouble raising investment
• Private equity and VC investment in green energy technologies reached $15 billion in 2023

Emerging Science

• Forest Stewardship Council releases Forest Futures Report
• Study in Current Biology attempts to synthesize environmental science frameworks for restoration
• Study in People and Nature examines perceptions of drone-assisted reforestation

Insight Spotlight: Jens Schmidt: Chinese Electrolyzer Manufacturers Outcompeting Europe and the US.

Keeling Capital shares this bracing LinkedIn note from Jens Schmidt of TES H2 who just visited three leading electrolyzer manufacturers in China. He claims an all-in installed cost from China of less than half of that of Western suppliers with comparable and often better quality due to their scale. We feel that it is worth a read.

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Nature-based Solutions ≥ $1M

Commitments and deals

Commitments

Iberdrola launches Carbon2Nature program project in Spain [Iberdrola]

• Iberdrola has launched the La Vera Carbon2Nature project, a subsidiary of the Carbon2Nature company, which aims to sequester 60 million tonnes of CO2 through restoration and conservation projects. The project will manage 1,499 ha of land in the Jaraiz de la Vera region of Spain and will aim to sequester 186,000 tonnes of CO2 by planting 700,000 trees.

BTG TIG will provide Microsoft with 8 million carbon removal credits through 2043 [streetinsider]

• Microsoft has announced an 8 million ton nature-based carbon removal credit deal with BTG Pactual's Timberland Investment Group, with credits generated from restoration projects across Latin America. The 8 million credits will be issued through 2043, and will fund the restoration of 135,000 hectares of natural forests in degraded landscapes, as well as sustainably managed commercial tree farms. The deal is one of the largest nature-based carbon removal credit deals to date.

Deals

GEF approves $736.4 million in spending [carbonpulse]

• The Global Environment Facility has approved $736.4 million in investments in projects fighting biodiversity loss, climate change, and chemical and waste pollution. The funding will go to 25 projects through the GEF Trust Fund, 14 through the Least Developed Countries Fund, and 3 projects from the Global Biodiversity Framework Fund. Biodiversity projects received $169.2 million, the largest tranche.

THIS raises $24.5 million in series C for alternative protein products [natural products online]

• THIS, a plant-based protein startup based in the UK, has raised GBP20 million ($25.4 million) in a series C funding round to expand its product range. The round was led by Planet First Partners.

NOAA invests $5.4 million in Washington state ecology projects [kxro]

• NOAA has invested $5.4 million in habitat restoration and land conservation projects focused on coastal ecosystem health in Washington State. The projects will partner with local communities and tribes to reduce climate impacts and enhance sea and estuary ecosystems, including eelgrass restoration, creek restoration, and coastal prairie preservation.

Downforce Technology raises $4.2 million for soil carbon measurement systems [tech cabal]

• Downforce Technology, a startup focused on developing technology tools to measure soil fertility, has raised $4.2 million for new products focused on Africa. The funding round was led by Equator VC and will be used to help the company improve and scale its soil data collection technology, which is used for verifying carbon projects, reporting emissions data, and improving soil health.

Seed to Carbon Forest Accelerator sells first credits [morningstar]

• Terraformation will deliver 15,000 TCO2e to Grosvenor through a mangrove reforestation project in Ghana, at an average price of slightly below $50 per tonne (around $750,000), with the goal of sequestering one million tCO2e by 2064. The project is the first sale from Terraformation's Seed to Carbon Forest Accelerator.

Fund Formation

Canada and ADB launch $255 million climate and NbS trust fund [zawya]

• Canada and the Asian Development Bank have created a new CAD360 million ($255 million) trust fund, which will support private sector projects across the Asia and Pacific regions focused on climate and NbS projects that accelerate gender equity. The ADB will manage the fund on behalf of Canada and will focus on lowering the risks of bringing viable projects to market and financing nature-based solutions.

Transition Finance ≥ $100M

Commitments and deals

Commitments

Adani Group pledges $100 billion in transition investments [economic times]

• The Adani Group has announced that it will shift its investment focus to prioritize the energy transition and digital infrastructure, with a goal of investing over $100 billion  in the energy transition. The company views its efforts as part of the larger Indian prioritization of the energy transition.

DOE announces $900 million to support SMR nuclear [DOE]

• The U.S. Department of Energy has issued a Notice of Intent (NOI) to fund up to $900 million to support the initial U.S. deployments of Generation III+ (Gen III+) Small Modular Reactor (SMR) technologies. The funding is drawn in part from the Bipartisan Infrastructure Law and is split into 2 funding tiers. Tier one will provide up to $800M to support up to two first-mover teams of utility, reactor vendor, constructor, and end-users or power off-takers committed to deploying a first plant and facilitating a multi-reactor, Gen III+ SMR order book. Tier 2 will provide up to $100M to address gaps in design, licensing, supplier development, and site preparation.

Canada’s UPP sets $870 million climate investment target [new private markets]

• Canada's University Pension Plan has created a dedicated pool for climate investment, setting a $870 million investment target by 2030. The capital will be deployed in private equity, private debt, and infrastructure via funds, co-investments, and direct investments, as well as new allocations in public market or fixed-income funds. The fund will exclusively invest in companies, assets, and technologies that help mitigate and adapt to climate change.

Deals

EIB & EIF invest $567 million to support Santander's lending to climate-focused SMEs [EIB]

• The EIB and EIF have invested €500 million ($535 million) and €30 million  ($32 million) respectively in a new Banco Santander securitization operation, the Santander Consumo 6 consumer credit securitization fund. The fund aims to catalyze €1.2 billion ($1.29 billion) in investment by providing working capital and liquidity to SMEs focused on green projects and women's entrepreneurship.

Recurrent Energy closes $513 million in financing for storage project [power engineering]

• Recurrent Energy, a Canadian Solar subsidiary, has announced the close of $513 million in financing for its Maricopa County Arizona Papago Storage project. Construction is expected to begin in the 3rd quarter of 2024. The financing includes a $249 million construction and term loan, a $163 million tax equity bridge loan, and a $101 million letter of credit facility. Lead arrangers for the deal included Bank of America, CoBank, DNB, Rabobank, Siemens, and Zions.

Rezolv Energy and Low Carbon Sign $311 million loan facilities for Romanian wind farm [business review]

• Rezolv Energy and Low Carbon have secured  up to €291 million ($311 million) loan facilities through their First Looks Solutions S.R.L. subsidiary to support the construction of their VIFOR wind farm. The project will be supported by Erste Group, UniCredit Group, and the European Bank for Reconstruction and Development, as well as the International Finance Corporation (IFC), Intesa Sanpaolo Group, OTP Bank, Raiffeisen Bank International AG and Garanti BBVA Romania. Once operational, Phase 1 of the project will install 192MW in capacity, with a planned expansion to 461 MW in Phase 2.

Wind holds $96.3 million first close for $139 million target fund [sifted]

• Wind has held the first close of its €130 million ($139 million) article 9 fund dedicated to climate deep tech startups in Europe. The close has raised €90 million ($96 million), and the fund will use the funds to back 30 seed and series A companies with tickets ranging from €500k to €5m.

Fund Formation

The Engine raises $400 million [boston globe]

• MIT's venture fund spin-off The Engine has raised almost $400 million for its climate and health-focused 3rd investment fund. The fund will focus on helping early-stage startups develop and commercialize technologies that help solve climate and health challenges.

Collaborative Fund raises $125 million [techcrunch]

• Collaborative has raised $125 million for its sixth flagship fund. The fund is focused on seed-stage companies with half held in reserve for follow-on investments, with climate impact as a linkage between investment categories.

Climate Action Africa Forum launches new climate fund for Africa [tech economy]

• Climate Action Africa has announced a $20 million investment in the Pan-African Climate Action Fund at the Climate Action Africa Forum. The fund will focus on small businesses and startups in the energy, agriculture, circularity, and transportation sectors.

Green Bonds ≥ $100M

Commitments and deals

Completed Issuances

Brazil issues second green bond tranche for $2 billion [agencia brasil]

• Brazil has raised $2 billion in its second issuance of sustainable public bonds, with requests totaling $4.7 billion. 77% of investments were from Europe and North America. The proceeds are expected to primarily finance sanitation and circular economy projects.

PEAB issues  $141 million green bond [esg news]

• Peab has issued a total of $141 million in green bonds from a round with 150 participants. The funds will support Peab’s investments in green buildings, clean transport, water management, and eco-efficient production processes, with the goal of climate neutrality by 2045 and a 60% reduction in CO2 intensity from production and a 50% reduction from input goods and services by 2030.

Carbon Removal ≥ $1M

Commitments and deals

Deals

Frontier buys $48.6 million in bioenergy with CCS from Stockholm Exergi [carbon herald]

• The Frontier carbon removal coalition has signed $48.6 million in facilitated offtake agreements from Stockholm Exergi. The deal will fund the retrofit of a district heating facility in downtown Stockholm to combust woody biomass waste and capture the emitted carbon for sequestration underground.

Salesforce commits $25 million to scale carbon removal tech [esg today] [GreenBiz]

• Salesforce has committed $25 million to purchase carbon removals from the Frontier Carbon Removal Coalition. The commitment brings the company a quarter of the way to its pledge of spending $100 million on carbon removal by 2030. The investment aims to help catalyze and improve carbon removal technologies.

Uzbekistan becomes first country to receive World Bank carbon credit payments for $7.5 million [world bank]

• Uzbekistan has become the first country to receive a payment from the World Bank through the Innovative Carbon Resource Application for Energy Transition (iCRAFT) project. The Transformative Carbon Asset Facility gave Uzbekistan $7.5 million for cutting 500,000 tons of carbon emissions.

Hard to Abate Sectors ≥ $1M

Commitments and deals

Commitments

EPA and DOE open applications for $850 million in methane pollution reduction projects [epa]

• The U.S. EPA and DOE have announced the availability of up to $850 million in funding to reduce methane pollution from the oil and gas sector. The funds are expected to help small operators reduce methane emissions, repair methane leaks from low-producing wells, improve community access to data and participation in monitoring, and enhance the detection and measurement of methane emissions from oil and gas operations.

Verdane provides two years of funding for Njord Carbon [environmental finance]

• Verdane has provided two years of full funding for Njord Carbon's pulp and paper mill carbon capture business, alongside the forest owner association Södra. Njord Carbon aims to handle 5 million tons of biogenic carbon dioxide by 2030, with viable offset credits delivered by late 2027 or early 2028. The investment amount was undisclosed.

Deals

LD Carbon Closes $28M investment in sustainable carbon black and pyrolysis oil [pr newswire]

• LD Carbon, a recovered carbon black producer, has closed a $28 million Series C funding round led by Woven Capital, Toyota's growth fund. The fund will use the investment to scale operations to recycle end-of-life tires into carbon black and pyrolysis oil, with the goal of having an annual capacity of 50,000 tons of end-of-life tires once the company's Dangjin city plant is completed by the end of 2024.

Materrup raises $27.8 Million in funding round [environmental finance]

• Eurazeo and others have invested €26 million ($27.8 million) in low-carbon cement technology manufacturer Materrup's latest funding round. The funding will support the growth of regional production plants across Europe to 10 plants.

Blue Economy ≥ $1M

Commitments and deals

Deals

Canada invests $28.7 million in salmon aquaculture and restoration [newswire ca]

• Canada has invested CAD39.4 million ($28.7 million) across 15 projects with the aim of addressing the effects of climate change on watersheds and salmon habitat on the Pacific coast. The projects range from salmon habitat restoration projects to climate change effect monitoring projects.

XOCEAN secures $53 million to scale ocean monitoring technology [sustainable times]

• XOCEAN, an Irish oceanic data company has secured €30 million ($32 million) million from a series B funding round, which was oversubscribed. The company also received €20 million ($21 million) in venture debt from the EIB. The company uses Uncrewed Surface Vessels (USVs) to gather oceanographic data to support renewable energy projects and other sustainable oceanic development.

Australia invests $18.8 million in reef restoration [dcceew]

• The government of Australia will invest AUD28.5 million to support the restoration and rehabilitation of the Great Barrier Reef, split across 18 projects. The projects include restoring the resilience of seagrass meadows, supporting and training Traditional Owners and  community members to monitor, restore and protect reef areas, and improving reef water quality.

Florida invests $5 million in artificial reefs [florida politics]

• The State of Florida's most recent budget will provide $5 million dollars to support reef ecosystems through the construction of artificial reefs. The artificial reefs are expected to help support reef ecosystems in vulnerable coral sites and were paired with other investments, including python removal.

Research and Knowledge Sharing

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Policy and Regulations

Republican-represented districts received the bulk of IRA funds [bloomberg]

• A new analysis in Bloomberg finds that of the $206 billion in clean manufacturing investment disbursed by the Biden Administration by April of 2024, $161 billion has gone to districts represented by Republicans, with 9 Republican districts accounting for 38% of anticipated investments. Many of these representatives were publically against the Inflation Reduction Act, CHIPS Act, or Bi-partisan Infrastructure Law, with Bloomberg speculating that these investments could help retain support for the spending packages even if Trump returns to power in 2025.

US launches National Food Waste Strategy [USDA]

• The USDA, EPA, and FDA have announced a National Strategy for Reducing Food Loss and Waste and Recycling Organics, which will serve as overall guidelines for the country in managing and reducing organic waste. The strategy aims to reduce the country's food loss and waste by 50% by 2040.

Australia agrees to biodiversity framework [carbon pulse]

• Australian federal and state environment ministers have agreed on a roadmap to conserve 30% of the continent's land and sea by 2030, with the inclusion of Other Effective land-based Conservation Methods (OECM) in the Nature Repair Market. The meeting finalized the government’s OECM framework and set the groundwork for the country's COP16 target, which will be presented in Cali in October.

Biden Administration releases IRA employment rules [the white house]

• The Biden Administration has announced final rules for jobs at companies receiving Inflation Reduction Act funding. The new requirements set prevailing wage and apprenticeship requirements for employees at clean energy projects , along with other certification and recordkeeping requirements.

Indian National Highways begin Miyawaki restoration pilot [economic times]

• The National Highways Authority of India is piloting a highway reforestation project utilizing the Miyawaki plantation method, beginning with a 53-acre parcel near Delhi. If successful, the NHAI plans to scale the technique across the country to increase green cover and ecosystem health near roadways.

Tightening of ESG fund rules in Europe sows confusion, potential outflows [inside climate news]

• Inside Climate News finds that ESMA's new rules on ESG funds could result in two-thirds of Europe's ESG-labeled funds having to change their names or sell off as much as $40 billion in assets to comply. Major sticking points include investments in oil and gas majors, which would not be allowed for funds labeled ESG or SRI, or with "impact" "sustainability" or "environmental" labels, though some investment would still be allowed in "transition" funds.

UK seeks to tap financial expertise to scale climate investments [bloomberg]

• Bloomberg reports on the Green Finance Institutes’ increasing importance to the UK’s strategy for funding climate action through its recent Green Transition Funds initiative. In particular, the GFI is aiming to use government guarantees to corral $25 billion in funding to support the build-out of the UK's electric charging network, though the guarantee is pending the results of the July 4th general election, which is widely expected to bring a change in government.

U.S Government releases updated Climate Adaptation Plans for agencies [the white house]

• The Biden Administration has released updated Climate Adaptation Plans for more than 20 federal agencies. The plans outline the data available to each industry regarding climate adaptation, as well as their operational steps to build climate resilience.

EFRAG and TNFD release new map for compliance between systems and CSRD [esg today]

• The Taskforce on Nature-related Financial Disclosures (TNFD) and the European Financial Reporting Advisory Group (EFRAG) have published a correspondence mapping document, which aims to help companies standardize their nature and biodiversity-related disclosures between the two systems. The directive will provide a comparison of the two organization's protocols and metrics and recommended approaches for reporting compliance.

UC Santa Barbara finds crediting systems could slash costs of ocean conservation by 98% [carbon pulse]

• Researchers at UC Santa Barbara have published a new paper examining the potential cost savings from establishing a voluntary ocean conservation credit trading scheme to incentivize investment in biodiversity protection. The results estimate a savings range from 37%-98% based on cost reductions from five different test policies. The scheme described would allow the trading of credits within predefined areas to ensure an equitable spread of conservation activities.

Finance Research and Updates

Carbon Pulse finds biodiversity monitoring companies struggling with lack of investment demand [carbon pulse]

• Carbon Pulse finds that nature tech companies focused on biodiversity monitoring are having difficulty raising funds, due to a currently weak market and a lack of demand. Companies hope that new developments, such as the UK's biodiversity market, will drive demand, but that many are in a holding pattern right now, despite recent innovations in the MRV space.

IEA releases Clean Energy Investment for Development in Africa report [IEA]

• The IEA has released a new report on Clean Energy Investment for Development In Africa for the 2024 G7 summit. The report outlines the current status of, and barriers to, climate investment across Africa, and the main initiatives needed to further develop energy investment capabilities.

Elemental Excelerator & Wilson Sonsini collaborate on new climate technologies funding models [elemental excelerator]

• Elemental Excelerator and Wilson Sonsini have partnered on the Development Simple Agreement for Future Equity (D-SAFE), a mechanism focused on streamlining funding for climate project developments and bridging the "Scale Gap" faced by companies transitioning from VC to later-stage growth capital. The nature of the partnership is laid out in a new whitepaper and focuses on providing bridge capital in the form of loans or convertible equity to help entities mitigate individual project risks.

Private equity and VC investment in green energy reached $15 billion in 2023 [carbon credits]

• S&P Global Market Intelligence finds that private equity and venture capital transactions in the renewable energy sector reached nearly $15 billion in 2023, the highest point in 5 years. An impact investor report also found that funds raised for renewable energy projects approached 25 times the value of fossil fuel assets in recent years, a sign of acceleration in transition investments.

RMI releases carbon credit data quality buyers guide [RMI]

• RMI has released "A Buyer's Guide to Carbon Credit Data Quality" which responds to recent issues within the voluntary carbon market and aims to provide buyers with information on how to evaluate VCM data before making investment decisions.

Emerging Science

New study examines stakeholder understanding of drone use for reforestation [wiley]

• A new paper in People and Nature focuses on the perceptions stakeholders form about drone assisted reforestation. The study finds that stakeholders have a positive perception about the ability of drones to ease labor shortages, support medium-scale restoration and access inaccessible areas, but that there is skepticism about the use of drones for seed planting due to regulations and restrictions.

New paper offers an ecological approach to restoration projects [phys]

• A new study in Current Biology "Harnessing ecological theory to enhance ecosystem restoration" aims to provide a science-informed framework for scaling restoration efforts. The research outlined 10 ecological theories that are currently underutilized and could support restoration efforts.

FSC releases forest futures report [FSC]

• The Forest Stewardship Council (FSC) has released a new Forest Futures report, outlining the current systemic role of forests both environmentally and socially, and discussing the council's definition of stewardship and outlook on improving forest stewardship going forward.

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