June 10 - June 14, 2024

Your Newsletter at a Glance

Commentary by C4C

Subscribe to Nature for Climate's weekly newsletter for more science and policy updates & read more about green central banking & other climate trends from our friends at Climate & Capital Media.

In this week's newsletter: $5.7 billion across 21 deals in transition finance ($4.9 billion), nature-based solutions ($341 million), carbon removal ($187 million), hard-to-abate industries ($213 million), and the blue economy ($70 million).

10 Essential Deals and Commitments:

Transition Finance & Green Bonds

• Saudi Arabia’s PIF is considering up to $15 billion in green & infrastructure investments in Brazil
• BNDES, China Development Bank, and AIIB sign a $1.72 billion green energy deal
• TPG Rise 2 is launched with a $8-10 billion target
• Rive Private Investment closes a $193 million transition fund

Nature-based Solutions

• The World Bank approves $200 million outcome bond for the Amazon rainforest
• CIF invests $61 million in NbS across the Dominican Republic and Rwanda

Hard-to-Abate Emissions

• Solugen receives a $214 million conditional loan guarantee from DOE LPO

Carbon Removal

• Canada Growth Fund agrees to 200,000 tonnes a year CCS offtake deal
• Microsoft finalizes details of purchase for 1.6 million tons of carbon removal from Ponterra and agrees to purchase 970,000 tons from Anew Climate

Blue Economy

• The GEF funds a new $70 million marine protected area in the ASEAN region

News Highlights

Policy and Regulation

• China releases a carbon footprint management system outline
• Argentina releases a deforestation-free beef certification scheme
• Bonn talks over post-2025 climate financing stall over disagreements

Transition & NbS Finance

• UN FAO estimates aquaculture catch outweighed wild catch for the first time
• Ørsted releases a biodiversity impact measurement framework
• UNEP estimates closing the natural capital investment gap could add $152 trillion to the global economy by 2030

Emerging Science

• A new study finds that plant biodiversity loss damages forest carbon storage capacity
• MSCI launches a new biodiversity footprinting tool
• MapBiomas releases 2023 deforestation fact sheet for Brazil

C4C News and Events

Learn more about what we're doing

We’ve made some updates to the newsletter to better represent the current landscape of climate investment and improve readability. Let us know what you think!

SECTION RENAMING: Climate is now Transition Finance

Our climate deals and commitments section has been renamed to better reflect its focus on the energy transition. The section's focus on major developments in green energy financing will remain the same.

NEW SECTION: Green Bonds

Our new Green Bonds section is grouped with transition finance and provides information about the latest sovereign and private green bonds dedicated to advancing the energy transition, promoting nature-based solutions, or supporting carbon removal and hard-to-abate industry decarbonization.

NEW SECTION: Carbon Removal

We’ve built out a new section focused on recent deals, commitments, and fund formation in the carbon removal industry, covering a range of solutions including engineered carbon removal, enhanced rock weathering, bio-char, and other new and emerging technologies.

NEW SUB-SECTION: Fund Formation

The new Fund Formation sub-section highlights recent closes and new funds focused on any of our major section categories.

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Nature-based Solutions ≥ $1M

Commitments, deals & fund formation

Deals

World Bank prepares a $200 million bond to boost Amazon reforestation [reuters] [world bank]

• The World Bank had given HSBC a mandate to structure an outcome bond for reforestation efforts in the Brazilian Amazon region. The bond will provide an expected $200 million in up-front financing for reforestation initiatives selected by Mombak. A portion of the return will be linked to the value of carbon credits generated by those projects.

CIF invests $61 million in the Dominican Republic and Rwanda NbS [esg news]

• CIF has endorsed two investment plans totaling $61 million in funding for nature-based solutions projects in the Dominican Republic ($30 million) and Rwanda ($31 million), as part of CIF’s Nature, People, and Climate (NPC) investment program. The plans have identified $500 million in co-financing and will pilot projects that aim to improve land use, bridge climate mitigation and adaptation, and develop sources of livelihood for rural communities and Indigenous people. The CIF Dedicated Grant Mechanism will channel $8 million directly to indigenous peoples and local communities as part of the plan.

Microsoft inks 1.6 million ton carbon credit deal with Ponterra for expected $60 million [orrick] [greenbiz]

• Further details have emerged on how Microsoft will purchase 1.6 million tons of carbon removal credits over 30 years from Ponterra, with the company agreeing to facilitate the planting of 6 million trees and 75 native species over 10,000 hectares on the Azuero Peninsula in Panama. The project was developed in collaboration with the Carbon Streaming Corporation and Rubicon Carbon, who had previously announced the project was under consideration in May 2024. The project is estimated to eventually cost between $60-70 million.

AfDB provides $16.87 million for Tunisian agro-forestry [tap]

• The African Development Bank has granted Tunisia $17 million to promote agroforestry and restore degraded forest landscapes (PARFD) in 3 regions across the country from 2024-2029. The loan carries a fixed annual interest rate of 1.11% and is repayable over 20 years, with an 8-year grace period.

Microsoft purchases 1 million tons of removal credits from Anew [esg today]

• Microsoft has announced that it will purchase 970,00 tons of carbon removal credits from Anew Climate, representing CO2 sequestration generated from improved forest management projects across the U.S. The projects are located on forests owned by Aurora Sustainable Lands, Acadian Timber Corp, and Baskahegan Company. The pricing of the credits was not disclosed.

Fund formation

KPTL launches Amazon bioeconomy fund [esg investor] [iadb]

• KPTL has launched a new Pan-Amazon bioeconomy fund which will invest across Brazil, Ecuador, Bolivia, Peru, Colombia, Guyana, and Suriname. The Amazonia Regenerate Accelerator and Investment Fund will be supported by the IDB, with an expected a total cost of $3,187,000.

Transition Finance ≥ $100M

Commitments, deals & fund formation

Commitments

Saudi Arabia’s PIF plans $15 billion investments in Brazil [zawya] [al-monitor]

• Brazilian energy minister Alexandre Silveira has announced that Saudi Arabia's Public Investment Fund (PIF) has announced intentions to invest $15 billion in Brazil, across green hydrogen, infrastructure, and renewable energy. The announcement was made at the FII Institute summit, which was sponsored by the Saudi PIF.

Washington State Investment Board suggests $400 million investment in TPG Rise [impact alpha]

• The Washington State Investment Board's investment committee has recommended a $400 million allocation to TPG's second Rise fund. The investment, if made, could be a major contribution to the fund's $8-10 billion target.

Deals

BNDES, China Development Bank, and Asian Infrastructure Investment Bank sign $1.72 billion deal [argus media]

• BNDES, the China Development Bank (CDB), and the Asian Infrastructure Investment Bank (AIIB), have reached a deal to finance up to $1.72 billion in Brazilian renewable energy projects. CDB will provide $800 million over  10 years to finance green power, manufacturing, agriculture, mining, and other renewable projects. AIIB set a goal of investing $250 million across the green energy and sustainable investment sectors.

UK Infrastructure Bank, Centrica & others invest $381 million in energy storage program [businesswire] [highview power]

• Highview Power has secured support from the UK Infrastructure Bank and Centrica for a £300 million ($381 million) investment to develop their first commercial-scale liquid air energy storage (LAES) plant in the UK. The investment will support the construction of the long-duration energy storage facility in Carrington, Manchester, which is expected to have a 300 MWh and an output power of 50 MW per hour for six hours. Construction will begin on the site immediately, with the facility expected to be operational in early 2026.

BeyondNetZero buys 25% of Sustainable Development Capital [new private markets] [general atlantic]

• General Atlantic's BeyondNetZero Fund will acquire 24.9% of Sustainable Development Capital LLP, a market developer, for an undisclosed sum. SDCL has a total market AUM of more than $2.5 billion and represents a further investment of Beyond Net Zero in the energy efficiency space.

Fund Formation

TPG launches new $8 billion target fund [the middle market]

• TPG has set a target of at least $8 billion and as much as $10 billion for its second TGP Rise Climate fund. The fund will focus on similar fields as the first TPG Rise Climate fund, which raised $7.3 billion to invest across renewable sectors. TPG expects the fund to ride the current wave of clean energy investment, which they speculate may grow to be as much as $6.5 trillion a year in a few years. The fund mandates that, for every $100 invested, one metric ton of carbon is removed or avoided.

Brookfield launches $5 billion emerging market climate fund with $1 billion anchor from ALTÉRRA [esg today]

• Brookfield Asset Management (BAM) and ALTÉRRA, a UAE-backed climate investment platform announced at COP28, have launched the Catalytic Transition Fund, a new investment vehicle aimed at directing capital into clean energy and transition assets in emerging economies. The fund has a $5 billion target and has been seeded with an initial $1 billion anchor commitment from ALTÉRRA and a commitment to eventually provide 10% of the fund's total capital from Brookfield. Brookfield hopes to use the fund to help close the emerging market clean investment funding gap. A first close is expected by the end of 2024.

Rive Private Investment closes $193 million transition fund [New Private Markets]

• The European Investment Fund has committed €100 million ($107 million) to Rive Private Investment's Infrastructure Impact Fund, bringing it to a €180 million ($193 million) first close. The fund invests in European SMEs within the energy transition value chain and is classified as an Article 9 fund under the Sustainable Finance Disclosure Regulation. The fund hopes to close at €300 million ($322 million) in 2025.

Swen raises $107 million for 3rd debt fund [environmental finance]

• Swen Capital Partners has raised €100 million ($107 million) for its 3rd mezzanine debt fund, the Swen Mezz Flex 3. The fund has a target size of €150 million ($161 million) and will invest in small and midcap firms in France and Europe with ticket sizes between €5 and €10 million.

Green Bonds ≥ $100M

New & completed issuances

New Issuances

EDF seeks $3.2 billion for mixed nuclear/renewable green bonds [bloomberg law]

• Electricite de France SA (EDF) is seeking a €3 billion ($3.2 billion) green bond sale with funds earmarked for nuclear power, renewables, and energy transmission investment, the first instance of earmarking for all 3 by the company. The bonds will be due in 7, 12, and 20 years.

Continuum Green Energy revives $660 million green bond push [economic times]

• Following uncertainty related to the Indian general election, Continuum Green Energy has announced it will proceed with a planned $660 million green bond offering. The bonds were rated dark green by S&P Global and will be invested in compliance with Continuum's green bond framework.

Completed Issuances

Export Development Canada releases $1 billion green bond [cision]

• Export Development Canada (EDC) has issued a $1 billion green bond, its fourth in the U.S. The proceeds will be dedicated to EDC's green asset portfolio, including loans made to companies active in clean transportation, renewable energy, energy efficiency, pollution prevention, and sustainable water management. The bond has a fixed rate coupon of 4.75% and matures June 5, 2034.

KPN issues $537 million green hybrid bond [morningstar]

• KPN has issued a €500 million ($537 million) hybrid green bond. The bond has a coupon of 4.875% per year and a first call date in June 2029. Proceeds from the sale will go to fund projects that align with KPN's sustainability goals in energy efficiency, circular economy and clean transportation.

Carbon Removal ≥ $1M

Commitments, deals & fund formation

Deals

Canada agrees to new CCS offtake deal [reuters]

• The Canada Growth Fund, a cleantech financing agency for the Canadian federal government, has signed its second deal to backstop carbon prices with a landfill waste-to-electricity conversion facility in Alberta. The facility would be the first of its kind in Canada and would incinerate 200,000 tonnes a year of municipal solid waste and produce waste while sequestering the emissions. The CGF expects to initially pay $61.80 per tonne for a term of 15 years, which could potentially cost $185,400,000 if the maximum amount is purchased.

CICE allocates $2 million across two oceanic carbon removal projects [carbon herald]

• The B.C. Centre for Innovation and Clean Energy (CICE), will invest CAD $2,757,000 ($2 million) in two new ocean-based carbon removal projects. The first project, Coastal Carbon, is a remote seaweed biomass monitoring solution developed in partnership with the Coastal First Nations Great Bear Initiative and Ocean Wise and will receive $623,770, while the second, provided with $1.38 million and led by Planetary Technologies will measure carbon removal and biological changes, aiming to enhance the ocean’s ability to absorb CO2.

Engie Pre-orders 5 million tons of NbS carbon credits from Catona [esg today]

• Engie has placed a pre-order for 5 million tons of nature-based carbon removals from Catona Climate. The removal credits will be issued from 2030-2029, with the company able to source from multiple projects with locked-in pricing.

Swiss Re signs 70,000 tonne BCR deal with Carbonfuture [esg today]

• Carbonfuture and Swiss Re have signed a 70,000 tonne biochar carbon removal (BCR), which will be sourced from Carbonfuture partner Exomad Green’s new facility in Bolivia. The contract includes a combination of carbon removal and avoidance certificates, with the proportion of carbon removal in the mix increasing each year, eventually reaching 100% in 2030.

Hard-to-Abate Sectors ≥ $1M

Commitments, deals & fund formation

Commitments

TotalEnergies and Air Products sign green hydrogen delivery agreement [rttnews]

• TotalEnergies and Air Products have signed a 15-year agreement for the annual supply of 70,000 tons of green hydrogen starting in 2030. Under the agreement, Air Products will deliver hydrogen to TotalEnergies' Northern European refineries, with the aim of avoiding 700,000 tons of CO2 every year.

Deals

Solugen receives $213.6 million loan conditional commitment from DOE LPO [renewables now]

• The US DOE Loan Program Office has given Solugen INC a conditional commitment for a $213.6 million loan guarantee that will support the construction of a bio-based chemical products facility in Minnesota. The plant, which is expected to be operational by the end of 2025, is focused on manufacturing chemicals using biological processes.

Blue Economy ≥ $1M

Commitments, deals & fund formation

Deals

ASEAN Center for Biodiversity and UNP launch GEF funded MPA project [UNDP] [GEF]

• The ASEAN Centre for Biodiversity (ABD) and UNDP have launched the GEF-funded Effectively Managing Networks of Marine Protected Areas in Large Marine Ecosystems in the ASEAN Region (ASEAN ENMAPS). The project will receive $12,548,861 from a GEF Project Grant and $57,907,646 in co-financing, for a total of $70,456,507. The project will be implemented from 2024 to 2029 with the cooperation of the governments of Indonesia, the Philippines, and Thailand, and will focus on upscaling national initiatives to help develop and manage MPAs in the region, its networks, and associated marine corridors through integrated coastal management, marine spatial planning, and ecosystem-based management of fisheries.

Fund Formation

Candriam launches sustainable water fund [esgtoday]

• Sustainability-focused asset management firm Candriam has announced the launch of the Candriam Sustainable Equity Water Fund, which will invest in companies pursuing and developing solutions to reduce pressure on water resources caused by human activities. The fund is listed under article 9 of the EU SFDR and will target “water solutions enablers” providing solutions to treat, transport, distribute and valorize water, and “water efficiency leaders” reducing water intensity through their own processes in high water use sectors.

Research and Knowledge Sharing

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Policy and Regulations

Brazil to require climate risk provisions in some new concession contracts [bn americas]

• Brazil has announced that waterway concessions for the Madeira River and the Mirim Lagoon will consider climate change scenarios, including a budget for situations of extreme climate risk and encouraging the use of sustainable fuels. The provisions are the first such ones for a water concession in Brazil.

Republicans continue congressional grilling of climate coalitions [reuters]

• A Republican-helmed house committee held an adversarial interview with GFANZ leaders, including Mark Carney and Mary Schapiro, as part of an escalating push against business coordination on combatting climate change. The interviews lasted several hours and were seen as the latest signs that Republicans may take aggressive action against ESG and coordination on climate goals should Donald Trump win the 2024 election.

China releases carbon footprint management systems [reuters]

• China has released plans for a "carbon footprint management system" expected to go into effect in 2027. The system will set standards for measuring carbon emissions for about 100 key products throughout the Chinese economy, with the hope of expanding the guidance to 200 by 2030. The calculations are expected to be important in avoiding complications from the EU carbon border tax.

IDB launches Natural Capital Action Plan [IDB]

• The Inter-American Development Bank, IDB Invest, and IDB Lab have launched a 2024-2025 Natural Capital and Biodiversity Mainstreaming Action Plan, which aims to help embed biodiversity and natural capital within the Bank's operations.The plan is meant to dovetail with the group's institutional strategy which aims to integrate biodiversity, natural capital, and climate action as vertical priorities into the organization.

Argentina releases certification scheme for deforestation-free beef [euractiv]

• Argentina has released a new scheme to certify beef as deforestation-free, known as ISEC. The system aims to reduce potential problems from the EU anti-deforestation regulation when it takes effect in 2025. The system will use geolocation data to certify the sustainable sourcing of livestock products.

Group of West African countries call for carbon offsets [reuters]

• A group of 10 West African countries has sent a joint letter to SBTI asking the verifier to approve the use of nature-based carbon offsets in its net-zero guidance. The letter was signed by Burkina Faso, Cape Verde, Ivory Coast, Gambia, Guinea-Bissau, Guinea, Liberia, Mali, Senegal, and Togo, and pushed back against recent critiques of the SBTI's earlier decision to consider the use of offsets.

Bonn Climate Finance talks end in stalemate [climate change news]

• Talks in Bonn regarding post-2025 climate financing stalled over disagreements between emerging market countries and industrialized countries. The talks yielded a 35-page input paper with little consensus on how developed countries would scale the financing of climate solutions in developing ones.

Finance Research and Updates

Ørsted debuts biodiversity measurement tool for renewables projects [climate action]

• Ørsted has announced it is developing an impact measurement framework focused on reporting biodiversity impacts across projects and markets. The framework was developed in collaboration with the Biodiversity Consultancy and is expected to align with emerging nature-related impact metrics and reporting frameworks from coalitions like the Science Based Targets for Nature, the Taskforce on Nature-related Financial Disclosure, World Economic Forum, and the Global Initiative for Nature, Grids, and Renewables.

Investors release letter supporting Climate Action 100+ [harvard]

• A group of asset owners representing more than $4.6 trillion in assets have released a letter supporting the work of the Climate Action 100+. The letter stressed the importance of voluntary action to deal with systemic and climate risk and the importance of that action being coordinated.

UN finds aquaculture catch outnumbers wild fisheries for the first time [tribune]

• A UN FAO analysis of the 2022 fish catch found that aquaculture yielded 94.4 million tonnes of aquatic animal production -- 51 percent of the total, and 57 percent of the production destined for human consumption. However, wild fishery production continued to expand its ecological footprint, as the proportion of marine stocks fished within biologically sustainable levels decreased to 62.3 percent in 2021, 2.3 percent lower than in 2019.

Verra suspends VCM projects targeted to sting [mongabay] [carbon herald]

• Brazilian officials have conducted a major raid of Grupo Ituxi's offices, an organization that manages REDD+ projects in the Amazon rainforest. The Investigation alleges that the group set up their projects on illegally obtained public land, and sold carbon credits despite engaging in illegal logging on that land. Following the raid, Verra announced it had suspended the certification of the company's projects.

Report finds that NbS investment could deliver 20x returns if done properly [unep]

• The UN has released its new report Closing the Gap: Investing in Natural Capital to meet the Sustainable Development Goals, which estimates that $7.4 trillion needs to be invested to meet 9 key nature-related SDG targets. The report found that closing this natural capital gap could generate the equivalent of $152 trillion by 2030, with many co-benefits, including avoiding 4.5 million premature deaths every year until 2030, restoring more than 250 million hectares of agricultural land, and avoiding more than 27 million hectares of deforestation.

Pollination, TIFS and Rockefeller release regenerative agriculture financing instruments catalogue [rockefeller foundation]

• Pollination and Transformational Investing in Food Systems (TIFS), with support from The Rockefeller Foundation, have published a foundational guide for mobilizing and scaling capital for regenerative agricultural transitions. The Financing Regenerative Agriculture report covers the current state of regenerative agriculture financing, the primary barriers to increasing capital deployment, and the current major players with the capacity to improve the current state of the market.

IIGCC releases sovereign bonds and country pathways guidance [iigcc]

• The IIGCC has released target-setting guidance for how to integrate sovereign bond holdings into net zero investment strategies. The report covers methods for tracking and measuring financed emissions for sovereign bond holdings; ​creating or endorsing methodologies to assess net zero alignment at the country (issuer) level; setting net zero alignment objectives and targets; ​mapping and seeking engagement opportunities; and​ where possible, increasing funds to climate solutions and transition finance, as well as outlining steps for meeting those climate targets.

Emerging Science

New study finds the loss of plant species could exacerbate climate change [mongabay]

• A new study in Nature Communications finds that losses in biodiversity in forests could be increasing their loss of stored carbon. The study found that tropical biodiversity hotspots were the most likely to be hard hit by species loss when it came to their ability to store carbon.

Researchers propose new restoration framework for Karst regions [phys]

• Research published in Earth's Future has analyzed the natural and social dimensions of controlling rocky desertification in the South China Karst region and proposes a socio-ecological framework that focuses on forest degradation, carbonate rock constraints, and human impacts. The research aims to help maximize ecological restoration projects in Karst regions.

MSCI launches biodiversity footprinting tool [carbon pulse[

• MSCI has released a new tool for measuring the biodiversity impact of investments. The tool uses the Potentially Disappeared Fraction of species metric (PDF) to identify portfolio biodiversity footprints in both relative terms and compared to a global benchmark. The MSCI also hopes to add Mean Species Abundance (MSA) to the tool as well.

UNEP releases NDCs for forests report [unep]

• UNEP has released a new report focusing on enhancing the impact of Nationally Determined Contributions (NDCs) under the Paris Agreement to reduce deforestation and support forests. The paper finds that, under current NDCs, only eight countries include explicit, quantified targets to reduce deforestation, and  all fall short of the global ambition to halt deforestation by 2030. The report provides statistics on current NDCs impacts on forests, as well as recommendations on how to strengthen forest-based targets in NDCs.

New PASCI index measures soil carbon concentrations [phys]

• Researchers are beginning to further experiment with the Perimeter-Area Soil Carbon Index tool, which utilizes hyperspectral imaging and machine learning to try and gauge soil carbon health and productivity. The tool utilizes multiple spectral bands to predict soil organic carbon and could be potentially useful for gauging climate and deforestation impacts on soil carbon, and measuring soil carbon stocks.

MapBiomas releases 2023 Brazil deforestation report [mapbiomas]

• MapBiomas has released its 2023 deforestation fact sheet for Brazil. Among other findings, the report finds that deforestation in the Cerrado increased by 67.7%, while it decreased by 62.2% in the Amazon. Deforestation also rose by 59.2% in the Pantanal.

World Bank launches aquaculture investment guide [the fish site]

• The World Bank has released The Global Aquabusiness Investment Guide, which aims to help catalyze investment in sustainable aquaculture. The guide was built based on engagement with aquaculture stakeholders and focuses on how investors can understand the aquaculture landscape and its relationship to environmental issues and the sustainable development goals.

New Paper examines policy effects on energy decarbonization [nature]

• A new paper in Nature entitled Extent of global decarbonization of the power sector through energy policies and governance capacity, examines the effect of policies on green energy enacted during the 2007-2008 global financial crisis. The analysis suggests that policies had a demonstrable effect on emissions.

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