May 27 - May 31, 2024

Your Newsletter at a Glance

Commentary by C4C

In this week's issue: $8.2 billion across 17 deals in Climate ($7.7 billion) Nature-based Solutions ($257 million), Hard to Abate Sectors ($16 million) and the Blue Economy ($184 million).

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10 Essential Deals and Commitments:

Climate

• ECP completes a $6.7 billion fundraise
• Brookfield offers to delist Neoen for $6.6 billion
• TATA power begins to organize a $1 billion loan for clean infrastructure development
• Bloom Energy issues $350 million in green bonds
• Cloover raises a $114 million seed round

Nature-based Solutions

• Averon Park buys out Foresight Sustainable Forestry for $214 million
• Tullow buys $90 million in REDD+ credits from Ghana
• GenZero invests in a 100,000 hectare South African ecosystem restoration project

Hard to Abate Emissions

• Ørsted secures an expanded BECCS deal with Microsoft

Blue Economy

• UNDP and GEF invest $135 million to support Small Island Developing States

News highlights

Policy and Regulation

• The US releases new principles for the Voluntary Carbon Market
• The EU approves the CSDD and Net-Zero Industry Act, and leaves the Energy Charter Treaty
• EU commission study proposes a “Gross Ecosystem Product” measurement

Climate & NbS finance

• Developed countries reached a $100 billion climate finance goal in 2022
• Emerging markets green bond issuance rose by 34% in 2023
• IIGCC introduces net zero framework for private debt

Additional research pieces

• UNEP FI releases a new climate data report
• Half of all mangroves are at risk of some form of ecosystem collapse
• A new paper finds power storage is key to a smooth energy transition

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Climate Finance ≥ $100M

Commitments and deals

Commitments

Brookfield offers €6.1 billion to delist Neoen [environmental finance]

• Brookfield and Neoen have agreed to take the wind, solar, and storage asset management company private in a €6.1 billion ($6.6 billion) deal. Brookfield will acquire 53.2% of shareholding through the deal through Brookfield Global Transition Fund II, with backing from Temasek. Brookfield Renewable is the largest investor in that fund, and expects to invest  a further €500 million in the acquisition.  

Tata Power eyes $1 billion clean energy raise [power technology]

• Tata Power is negotiating with several lenders, including the State Bank of India, IndusInd Bank, and ICICI Bank, to help support a $1.6 billion investment in pumped hydro projects in the state of Maharashtra. The loan is expected to be either a bilateral agreement or a syndicated facility, and would be the largest local currency loan in India in 2024.

Deals

ECP raises $6.7 billion [morningstar]

• ECP has raised $6.7 billion in its most recent fundraise for electrification and decarbonization investment fund ECP V, with total commitments of $5.5 billion, and $2.3 billion in co-investment capital. Fund V will focus on increasing investments across power generation, renewables, and storage and decarbonization infrastructure.

Bloom Energy issues $350 million in green bonds [energynews]

• Bloom Energy corporation has launched a $350 million offering of 3% senior convertible green bonds due 2029, aimed at institutional investors. The company expects to use the net proceeds for general purposes, including R&D, and support new and ongoing projects.

Clean Energy Venturesraises $305 million for climate tech fund [ESG Today]

• Clean Energy Ventures, a climate tech-focused venture capital investor, has raised $305 million to close its second flagship fund, with a target of mitigating 75 gigatons of GhG emissions by 2050. The fund, which was founded in 2017, invests in companies commercializing capital-light advanced energy technologies and business model innovations. Companies that receive investments are expected to have a capability of mitigating at least 2.5 gigatons of CO2 emissions cumulatively between the initial investment and 2050.

CapitaLand Ascendas REIT issues S$300 in green bonds [TipRanks]

• CapitaLand Ascendas REIT, a Singapore-based real estate firm, has issued S$300 ($222.81) in green bonds, with DRB and AOCBCas joint lead managers and bookrunners. The funds will be used for financing or refinancing eligible projects under the company's Green Finance Framework.

Cloover raises $114 million in seed funding [economic times]

• Cloover has raised $114 million in debt and equity in a seed funding round led by Lowercarbon Capital. The firm will use the raise to support its technology which allows smaller renewable companies to access the value chain products.

Homecoming Capital invests $50 million in clean energy terminals [morningstar]

• Homecoming Capital has announced $50 million in investment in U.S offshore wind port infrastructure developer Clean Energy Terminals. The company will use the investment to execute early stage development work on a new portfolio of projects.

Doconomy raises €37 million [esg today]

• Doconomy, a Swedish impact fintech company, announced a €34 million Series B funding round, with proceeds aimed at expanding the capabilities of its consumer sustainability technology. The company aims to expand the capabilities of its carbon footprint tool using the new funding.

Nature-based Solutions ≥ $1M

Commitments and deals

Commitments

UK national park launches biodiversity investment scheme [bbc]

• South Downs National Park will be the first in the UK to offer a biodiversity investment scheme for businesses aiming to improve the biodiversity of the land. The park authority has earmarked 500 hectares of farm and country estate land across the park for investment for nature recovery as part of the park authority's ReNature campaign. The authority is hoping that 33% of the park will be managed solely for nature by 2030.

Deals

Foresight Sustainable Forestry taken private in £167 million deal [evening standard]

• Foresight Sustainable Forestry has been taken private by Averon Park, in a £167 million ($214 million) deal. Avalon will invest further capital in FAST to help it better access private capital and increase its environmental potential.

Tullow commits to $90 million carbon offset project [thebftonline]

• Tullow Oil will pay Ghana $90 million over the next decade to support the country's effort at slowing deforestation through a REDD+ Emissions Reduction Purchase Agreement Signed with the Forestry Commission. The initiative is expected to generate more than one million tonnes of carbon offset credits.

GenZero invests in 100,000 hectare restoration scheme [business times]

• GenZero is among investors backing the first phase of a 100,000 hectare ecosystem restoration project across the Eastern and Western Capes of South Africa. The project aims to sequester more than 30 million tonnes of CO2 over its lifespan, contributing to global carbon removal and reduction efforts. The current investments are for an undisclosed sum.

Hard to Abate Sectors ≥ $1M

Commitments and deals

Deals

EPA distributes $15 million to fund HFC reclamation projects [EPA]

• The US EPA has announced $15 million in grants to help support innovation in reclaiming and destroying hydrofluorocarbons, potent greenhouse gasses and common refrigerants that are difficult to safely dispose of. The investment will go to programs focused on managing CFCs at The University of Washington, Texas A&M, Drexel, UC-Riverside, and the Air Conditioning, Heating and Refrigeration Technology Institute.

US DOE invests $1.2 million across 24 CDR awardees [carbon pulse]

• The US DOE invests $1.2 million across 24 carbon dioxide removal purchase pilot prize semi finalists as part of a program that is expected to eventually distribute over $35 million to help develop new and emerging carbon removal technologies.

Ørsted secures expanded BECCS deal with Microsoft [carbon credits.com]

• Microsoft has announced it will expand a historic BECCS deal with Ørsted, purchasing an additional one million metric tons of bioenergy-generated carbon capture. The project will capture biogenic CO2 from burning wood chips and store it permanently underground. This follows on other carbon removal deals from Microsoft, including 3.33 million tons from Stockholm Exergi.

Carbonx Climate buys 2,699 credits from Carbon Capture Scotland[carbon herald]

• Carbonx Climate, a carbon credit procurement and management company, has purchased 2699 metric tons of carbon removal on behalf of a consortium of clients from Carbon Capture Scotland for an undisclosed sum. The removal credits were procured through CCS's biogenic carbon dioxide removal technology.

Blue Economy ≥ $1M

Commitments and deals

Commitments

UNDP launches 4th ocean innovator cohort [UNDP]

• The UNDP has launched its fourth cohort of ocean innovators at the 4th International Conference on SIDS. The 13 chosen organizations will receive up to $40,000 in financial support and receive intensive mentorship to support projects focused on  the sustainable blue economy in their respective countries.

Deals

UNDP and GEF invest $135 million to support environmental adaptation in Small Island Developing States [UNDP]

• The UNDP and the Global Environment Facility have launched a $135 million Blue and Green Islands Integrated Programme as part of the 4th International Conference on Small Islands Developing States. The BIG-IP will support 15 Small Island Developing States across multiple regions, and will focus specifically on sustainable protection and utilization of ocean and natural resources.

Washington Tribes receive 39.4 million to restore salmon habitat [krem]

• NOAA will invest $39.4 million in improving fish passage in Washington state rivers. The projects will mainly consist of removing small dams to open salmon and steelhead migration routes and allow more salmon to return to their spawning grounds. The $39.4 million was distributed through organizations representing local native American communities.

Hatch blues secures $10 million for second accelerator [the fish site]

• Hatch Blue, a sustainable aquaculture fund, has raised $10 million for its next round of investments through its accelerator investment vehicle. The vehicle has invested in 12 companies, with -plans to invest in 24 more.

Research and Knowledge Sharing

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Policy and Regulations

US unveils VCM principles [environmental finance] [NYT] [whitehouse] (Courtesy of Nature4Climate)

• The Biden Administration has started a new initiative to try and support the development of more robust and reliable Voluntary Carbon Markets. The "Principles for High-Integrity Voluntary Carbon Markets", signed by numerous cabinet secretaries including Janet Yellen, Jennifer Granholm, and Tom Vilsack, covers general principles for how Voluntary Carbon Markets should operate and avoid greenwashing, including meeting credible atmospheric integrity standards, prioritizing measurable emission reductions within own value chains, disclosing the nature of retired credits, and facilitating efficient market participation to lower transaction costs. The decision comes on the heels of legislation and initiatives supporting voluntary carbon markets in U.S agriculture and industry, including the Growing Carbon Solutions Act contained in the 2022 omnibus U.S spending bill, and the DO's efforts to subsidize carbon removal technology development.

EU commission study proposes adding ecosystem value to GDP [carbon pulse]

• The EU commission has published a study calling for establishing a separate ecosystem to complement GDP, known as Gross Ecosystem Product (GEP). The metric would cover the supply of ecosystem services within the bloc and within individual countries, and could form part of building a continent-wide system for measuring biodiversity benefits and impact within the economy.

ECA recommends NbS for accelerating development and social equity [engineering news]

• The Economic Commission for Africa's deputy executive secretary Antonio Pedro stated at the African Natural Capital Alliance Annual Summit that NbS represents a major pillar of implementing the continent's Sustainable Development Goals and Agenda 2063. In particular, he noted that a ECA/Dalberg study found that Africa could mobilize $82 billion a year if carbon prices reached $120/T of CO2 and that the blue economy could generate $576 billion a year across the continent if conditions were set up properly.

EU approves CSDDD [impakter] (Courtesy of Nature4Climate)

• The EU Council has adopted the previously legislated corporate sustainability due diligence directive, marking another major piece of the European Green Deal implemented before the EU elections. The initiative will apply to companies with over 1,000 employees and a turnover exceeding €450 million, and will mandate that these companies establish a risk-based system to monitor, prevent, or remedy human rights or environmental damages throughout their operations.

EU Council gives final approval to net-zero industry act [europa]

• The EU council has adopted the net-zero industry act, a centerpiece of the European Green Deal system of legislation. The regulation supports the deployment of net-zero technologies and aims to help the European Union compete on the global stage with other green industries.

EU quits Energy Charter Treaty over fossil concerns [reuters]

• The European Union has left the Energy Charter Treaty due to concerns that it empowers international fossil fuel companies and locks in the use of fossil energy. Member states that wish to remain will be able to vote during the 2024 Energy Charter Conference to modernize the agreement, and countries exiting will still be subject to a 10 year sunset clause.

Finance Research and Updates

Latam solar startups see funding surge [solar quarter]

• Latin American startups in the clean energy sector have seen major investment, with $750 invested across 76 rounds between 2021 and 2024, according to an EnergyTech Report by Distrito, a platform for emerging technologies in the region. Brazil made up 80% of the investment landscape, with $605.9 million raised through 61 operations.

Developed countries reach $100 billion annual climate finance target [clean energy wire]

• Developed countries have finally made good on a pledge to mobilize 100 billion to developing countries for climate finance by 2020, in 2022, two years off target. In 2022, those countries managed to mobilize 115.9 billion dollars, a 30% increase of the previous year, with 91.6 billion coming from public sources, and 20 billion from private finance. The majority of financing was earmarked to mitigation efforts.

Emerging market green bond issuance surged 34% in 2023 [ecofin agency]

• Green bond issuance in emerging markets rose 34% in 2023 to $135 billion, up from $101.2 billion in 2022, according to a new report published by Amundi and the IFC. China was the dominant issuer among emerging markets, as it has been since 2021, and Sub-Saharan Africa ranked last in bond issuances. 37.6% of total funds were allocated to renewable energy projects, with 29.4% to sustainable buildings, 12.5% to water projects, and 11.7% to transportation.

UF study quantifies exposure to climate risk among U.S public companies [mainstreet daily news]

• A University of Florida study on earning call transcripts from almost 5000 U.S public companies found that companies facing high transition risks from either physical or regulatory factors tended to be valued at a discount by investors. However, efforts to mitigate climate risk and incorporate green technologies and sustainable investment tended to reduce this discount.

IIGCC introduces private debt net-zero framework [private equity wire]

• The IIGCC has released a Net-zero Investment Framework for the private debt industry, developed alongside Ceres with input from the IIGCC's private markets working group. The framework includes guidance on three way engagement models involving private equity, climate-related ESG margin ratchet, and the inclusion of requests for climate disclosures in loan documentation, among other segments.

VCM contracted in 2023 [ecosystem marketplace]

• Ecosystem Marketplace has found that the Voluntary Carbon Market contracted to a reported transaction value of $723 million in 2023, a 56% year-on-year decline. Poor press over greenwashing concern and market patience in advance of potential regulation were seen as major factors in the decline. REDD+ credits also lost 62% of their value year over year, with average credits falling 23 percent on the back of negative media coverage. However, average costs of CO2e for carbon credits fell only slightly, to $6.53, still higher than any year before 2022.

SBTI tightens banking guidelines [msn]

• The SBTI has tightened the rules for financial institutions looking to comply with the initiative, which will cover both new applicants and the 131 financial institutions currently with SBTI approved plans. The new rules will require firms to align their scope 1 and 2 emissions, with efforts to cap global warming at 1.5 degrees celsius, rather than well below 2. Scope 3 emissions will be required to align with well below 2 as opposed to 2 degrees, among other changes.

Emerging Science

Rio de Janeiro bay reforestation demonstrates mangrove potential for climate mitigation [ap news] (Courtesy of Nature4Climate)

• The AP reports that a mangrove plantation in Rio de Janeiro has shown promise as a flood control option for the surrounding area, suggesting a potential option for other Brazilian regions threatened by floods.

New paper assess impacts of renewable variability on decarbonization strategies [science direct]

• A new paper in Applied Energy entitled Assessment of the impacts of renewable energy variability in long-term decarbonization strategies, assesses the importance of hourly power variability on carbon neutrality pathways. The paper examined different rollout rates for renewable energy systems across countries and their effects on power variability, and concluded that high levels of flexibility technologies such as energy storage promoted more smooth decarbonization pathways.

UNEP FI releases climate data challenge report [unepfi]

• The UNEP FI Risk Center has released a technical supplement to its annual Climate Risk Landscape Report focused on the current state of climate risk data and the potential for open source platforms to improve access, and enable companies to acquire and utilize low cost climate data.

Study finds seaweed sinking to the bottom of the ocean stores more carbon than previously thought [phys] (Courtesy of Nature4Climate)

• Two new studies of coastal vegetation find that seaweed forests transport between 10 to 170 million metric tons of carbon into the deep ocean, where it is stored on a longer term basis than the carbon that remains in the seaweed ecosystems. The study highlights the importance of protecting seaweed forests from pollution, overfishing and aquatic heatwaves to preserve this sink.

Half of all mangrove at risk of loss [IUCN] (Courtesy of Nature4Climate)

• The IUCN has assessed mangroves globally in a first of its kind assessment and found that more than 50% of mangrove ecosystems are at risk of collapse, with 20% assessed as endangered or critically endangered. The study was conducted by 250 experts based in 44 countries, and classified mangroves across 36 different regions.

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