March 4 - March 8, 2024
Your Newsletter at a Glance
Commentary by C4C
Dealflow Summary:
- The Australian Federal Government announces $67 billion investment plan to develop 32GW of renewable capacity by 2030. ABP plans to increase climate and biodiversity investments to up to $30 billion by 2030. Stellantis commits $6 billon in Brazilian hybrid and electric production by 2030 & Toyota commits $2.2 billion in Brazilian hybrid and electric auto investments from 2025-2030. EQT closes EQT future fund at $3.3 billion. USDA releases 2.3 billion in rural green electrification funds. Cibus Capital closes 2 climate funds at $645 million The Green Climate Fund approves $490 million for 11 projects. Bruce Power raises $445 million from nuclear green bond. The U.S Government announces $425 million in decarbonization and electrification grands for former coal production areas. Adani raises $409 million from oversubscribed green bond. Carbon Equity closes Climate Tech Portfolio 2 fund with $109 million raised. Hatchblue raises $81 million in second close of sustainable aquaculture fund. The U.S Department of the Interior releases $72 million for tribal electrification, Ireland invests $37 million in biodiversity data collection and analysis, and more.
Policy & Regulatory Highlights:
- UK Government announces regulatory plan for ESG rating
- Nature details climate consequences of 2024 elections worldwide
- USDA releases justification paper for planned agricultural carbon market technical assistance and verification body
Climate & NbS Finance:
- Manufacturing investment soars to new heights on back of U.S climate spending
- UN Projects $2.5 trillion a year climate finance gap for Africa by 2030
- Green bonds have hottest ever February at $54 billion
Emerging Science:
- Long term study finds that enhanced rock weathering sequesters carbon and improves yields on U.S fields
- WWF and Climate Focus release new tool for incorporating agriculture in NDCs
- Nature finds major carbon mitigation potential from including Brazilian mangroves in the country’s REDD+ initiatives
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Climate Finance ≥ $100M
Commitments and deals
Commitments
- The Australian Federal government has announced a tender process for 6 gigawatts of renewables for May of 2024, as part of a $67 billion investment for the installation of 32GW targeted for completion by 2030. The process will be supported by providing price support for developers when revenue falls below a specified floor.
ABP plans €30 billion in climate and biodiversity investments [Environmental Finance]
- Dutch Pension Fund ABP has announced it will aim to invest EU30 billion by 2030 in investments that offer both returns and impacts in climate and biodiversity. The Fund is also undergoing a re-evaluation of its company selection process to improve risk management, with a major focus on potential risk from climate and biodiversity crisises. At least EU 1 billion of its EU 30 billion commitment will go towards biodiversity solutions, with at least EU10 billion earmarked to climate solutions. The remainder will be invested in affordable housing and sustainable energy.
NatPower UK plans $12.9 billion investment in battery energy storage systems [The Guardian]
- Nat Power UK has announced plans to invest £10 billion in battery storage projects over the course of the next few years in a major boost to the UK's green energy industry. The Investments aim to eventually lead to 60 gigawatt hours of battery storage being installed across the country, as well as some additional and unspecified solar and wind projects.
RBC committed to increase renewable energy financing to $11 billion by 2030 [PVBuzz]
- The Royal Bank of Canada has announced targets to triple its loans for renewable energy projects to CAD$15 billion ($11 billion) by 2030, though it intends to maintain its investments in fossil fuel companies. RBC has also committed to raising its low carbon lending to C$35 billion and allocate C$1 billion by 2030 to support companies aiding clients in achieving climate goals.
- Stellantis has announced that it plans to invest 30 billion reais ($6.07 billion) in Brazil from 2025-2030 as part of a rollout of hybrid flex vehicles, In addition to a still unspecified electric vehicle initiative.
Toyota to invest $2.2 billion in Brazilian hybrid and electric car manufacturing [Reuters] [Bloomberg]
- Toyota plans to invest $2.2 billion in Brazil to support hybrid SUV development, with production expected to begin in 2025 on a new compact hybrid-flex vehicle, with a Brazil specific vehicle expected to join it in 2026.
- The Regional Transmission Infrastructure Financing Facility has announced that Climate Fund Managers will manage its blended finance fund. The Fund is backed by the South African Power Pool and Southern African Development Community, and will be split into a development fund of $100 million and a construction fund targeting $1.2 billion. The development fund will provide concessional capital, and the construction fund will make direct investment to provide patient capital to power companies to help them build out transmission and improve climate resilience.
Deals
EQT Future fund closes at EU €3 billion ($3.3 billion)
- EQT has announced its final close of its EQT Future fund at $3.3 billion, bringing its total equity platform to $27 billion in commitments. The fund will invest in projects that provide benefits for Climate, Nature, and Health and Wellbeing.
Biden Administration releases $2.3 billion in funding for rural green electrification [USDA]
- The USDA is investing $2.3 billion across 38 projects to support rural electrification and renewable energy rollout. The projects are financed through the Powering Affordable Clean Energy (PACE) and Electric Infrastructure Loan and Loan Guarantee programs, both underwritten by the Inflation Reduction Act. The funding will support improved power lines, smart grids, and renewable energy systems.
Avaada energy invests $600 million in Maharashtra solar plant [Solar Quarter]
- Avaada energy, the renewable energy arm of Avada group, has announced a INR 50 billion ($600 million) investment in decentralized agricultural solar PV projects across Maharashtra, totalling 1,138 MW of installed capacity by 2025.
GCF approves $490 million in climate projects [yna] [Argus Media]
- The UN Green Climate fund has approved $490 mn in funding for 11 greenhouse gas reduction and climate adaptation projects. The projects range from establishing a specialized climate finance unit for Cambodia state owned agricultural bank to improving Indonesian energy efficiency and supporting a climate action fund for Pakistan. The GEF hopes that the investment will mobilize an additional $770 billion in private financing.
Nuclear Operator Bruce Power raises $600 million in green bonds [Bruce Power]
- Bruce Power, a Canadian nuclear energy provider that operates the Bruce Nuclear Generating Station, has announced the close of a CAD$600 million green bond ($445 million) in line with Canada's new nuclear green bond frameworks.
Adani Green bond raises $409 million [Reuters]
- The Adani group's renewables division, Adani Green Energy, has issued a $409 million 18-year green bond after receiving $3 billion of demand. The Bond represents a major rebound for Adani after a major selloff in 2023.
Valmet issues € 200 million in green notes [Cision]
- Finnish Pulp paper and energy company Valmet has announced the issuance of €200 million in 5 year notes at a fixed annual interest rate of 4 percent, allocated to 42 investors. The investment will support investments in line with the company's green finance framework.
M&G Catalyst invests €150 million in regenerative farming projects [M&G]
- M&G has announced a €150 million commitment to Generate Asset Management's Regenerate European Sustainable Agriculture Fund. The investment will support European sustainable agriculture companies throughout the bloc, with a focus on scaling regenerative agriculture.
Carbon Equity raises €100 million for climate investing platform [Eu-Startups]
- Carbon Equity has raised €100 million ($109 million) to close its Climate Tech Portfolio II, exceeding an initial EU 75 million target. The fund will invest in 7 to 10 selected private equity and venture capital funds to support solutions including green hydrogen, battery technology, carbon free cement, bioplastics, and industrial heat pumps.
Hatchblue raises $81 million aquaculture fund in second close [Intrafish)
- Hatch Blue Group, a sustainable aquaculture investor, has announced the second close of its Blue Revolution Rund, having hit its target of EU75 million ($81 million). The Fund invests in sustainable aquaculture startups, and has already made investments in traceability, improved feeding, and single cell protein production companies.
Biden Admin announces $72 million to electrify homes in Native American areas [USDOI]
- The U.S department of the interior is dedicated $72 million in Inflation Reduction Act funding to support clean energy electrification projects across 21 tribes throughout the country. The grants will be distributed over the course of 2024, with additional ones available later this year.
Nature-based Solutions ≥ $1M
Commitments and deals
Deals
Cibus Capital raises $645 million to close Cibus Fund II and Cibus Enterprise Fund II [AGfundernews]
- Cibus Capital has closed its mid-market private equity fund Cibus Fund II, with $510 million in commitments, as well as its second venture fund Cibus Enterprise Fund II, with #135 million in commitments. The funds will invest in agricultural companies that focus on improving efficiency, lowering energy use, and lessening environmental impact.
Ireland invests EU 34 million in biodiversity data platform [BNNbreaking]
- The Irish National PArks and Wildlife Service will utilize EU 34 million in investment to develop a unified biodiversity data platform for the country, as part of the EU Life Programme. The project aims to set a new standard for biodiversity collection and provide a blueprint for future data collection efforts in the EU and elsewhere.
Mirova invests $8.5 million in sustainable macadamia farming in East Africa [Farmers Review Africa]
- Mirova will invest $8.5 million in Pamoja, which supports smallholder farmers in Kenya and Tanzania as they adopt sustainable macadamia farming. The company will use the investment to expand their overseen land to 6,200 hectares across the two countries and support 13000 small local producers by 2031.
Scotland launches seagrass restoration scheme with GP 2m in funding [BNNbreaking]
- Scotland will invest GBP 2 million to restore 35 acres of seagrass meadows along its coast, representing one of the largest ever investments in seagrass meadow restoration. The project will pilot arresting seagrass meadow loss, currently estimated at 7% a year.
WARC raises $7.5 million for regenerative agriculture in West Africa [Impact Alpha]
- WARC, a Ghana based social enterprise supporting smallholder farmers in Africa, has announced $7.5 million dollars in investments to help it scale its training hub model to support acquisition of regenerative technologies and techniques, and market access for the 20,000 smallholders in its network.
Hard to Abate Sectors ≥ $1M
Commitments and deals
Deals
- The US DOE will invest $425 million from the bipartisan Infrastructure Law to reduce industrial emission and advance clean energy manufacturing in former coal production regions throughout the U.S. The grant program will be structured around clean manufacturing, recycling, and industrial decarbonization themes, with concept papers due April 8 2024, and full applications required by June 24, 2024.
Stormfisher hydrogen secures $30 million to develop e-fuel production facilities [Cision]
- ARC Financial Corp will provide a $30 million investment to support Strom Fisher Hydrogen's e-fuel production. The company aims to use the funding to develop hydrogen, e--methane, e-methanol and green ammonia production facilities, with 300 MW of e-fuel production facilities currently in development.
- Greenlyte Carbon Technologies has closed its initial pre-series A round with €10.5 billion from investors including Earlybird Venture Capital, Green Generation Fund, and Carbon Removal Partners. The company has raised EU20 million since 2022 to develop its liquid sorbent CO2 Removal technology, which produces hydrogen for use as a feedstock.
Research and Knowledge Sharing
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Finance Research and Updates
Net Zero Banking Alliance Revises Guidelines [Reuters]
- The Net Zero Banking Alliance has modified its guidelines to help constituent banks navigate ongoing pressure in the U.S against ESG and climate conscious investment and banking . The new guidelines contain language stressing independence to help bankers avoid running into antitrust lawsuits from Republican attorney generals.
New Paper examines return spillover from carbon financial markets [Science Direct]
- A new study in Research in International Business and finance examines examples of return spillovers between carbon and financial markets in extreme condition. The study suggests that spillovers are strengthened in extreme conditions.
Global Green Bonds Top $54 billion in February [Bloomberg]
- Global Green bonds continue to rise in 2024, with $54.7 billion issued in February of 2024, marking the most active February since the inception of the green debt market in 2007.
UN projects $2.5 trillion climate finance gap in Africa by 2030 [Reuters]
- The U.N Economic commission for Africa believes that Africa will fall $2.5 trillion short of its climate finance needs due to low rates of international investment on the continent. The continent attracts only 2% of global clean energy investments currently, and is already losing 5% of GDP due to climate effects.
DBS becomes first bank to finance coal plant phaseout [Responsible Investor]
- DBS has rewritten its climate policies to allow for the possibility of financing early retirement of coal plant in Asia, making it the first bank to publicly endorse Asian coal phaseouts, a move supported by the Singapore Central Bank and FRANZ.
- Private investment in manufacturing continues to surge, propelled by the Bipartisan Infrastructure Law, Chips Act, and Inflation Reduction Act, reaching $225 billion in January, a 180% jump. The investment has yet to translate into manufacturing activity, but could cause a major boom later in the decade.
Major banks leave Equator Principles amid anti-ESG backlash [The Guardian]
- Mounting lawsuits leveled by conservative states are causing major US FIs to abandon their public climate commitments, with Citi, Bank of America, JP Morgan Chase and Wells Fargo leaving the nonbinding Equator Principles for financing of extractive industries. It is unclear if the withdrawal will substantially alter company behavior, but it comes amid increasing pressure on ESG investing from Republican politicians.
Unilever reviews key trade associations climate related lobbying [Business Green] [Unilever]
- Unilever has released its first sustainable commitment review of 27 industry associations, finding that 8 have no public record of climate policy engagement, 4 have low engagement, and eight are misaligned with Unilever's climate commitments. The report is expected to increase pressure on industry associations to set climate commitment targets and take action on existing plans.
- The UN Green climate fund has decided to leave a forest conservation project in Nicaragua over human rights concerns raised by local communities. The decision came after a grievance process of 3 years, and may indicate a potential for similar decisions in other areas marred by conflict and exclusionary conservation.
Policy and Regulations
- David Carlin provides an infographic breaking down the similarities and differences between the recently released SEC climate rules, the EU CARD, and the IASB's climate disclosure rules.
UK Government to Regulate ESG ratings [Environmental Finance]
- The UK Government has announced that it will release guidelines for regulating ESG ratings for firms operating in the country. The reforms were welcomed by the UK Sustainable Investment and Finance Association, which believes the policy will help restore trust to the industry.
Guyana plans sale of first eligible carbon credits [Reuters]
- Guyana has made its first eligible carbon credits available for airlines, issuing 5 million produced under a UN-backed CORSET deal. The credits are expected to help prevent a shortage of carbon credits needed under the International Civil Aviation Organization's regulation requiring offsetting emissions above a baseline of 85% of 2019 levels.
USDA releases justification report for agricultural inclusion in offset markets [USDA]
- The USDA has published an 8 page intention paper outlining the Greenhouse Gas Technical Assistance Provider and Third Party Verifier Program authorized under the 2023 Consolidated Appropriations Act of 2023. The report provides an overview of how the USDA will support the creation of the program and provide assistance to the U.S agricultural carbon industry.
Nigerian Federal government forms committee on carbon markets [NairaMetrics]
- The Nigerian Federal Government has announced an intergovernmental committee on carbon market activation charged with developing a systematic blueprint for the country's carbon market. The plan is supported by the Africa Carbon Market Initiative and aims to build a $2.5 billion carbon market.
- The World Wildlife Fund and Climate Focus have built an online tool that allows planners to understand the role of agriculture in the Nationally Determined Commitments required under the Paris Agreement.
EU to exit energy treaty over climate concerns [Reuters]
- The EU joins the UK in beginning withdrawal from the 1998 energy charter treaty over concerns about its impact on climate change. The withdrawal will now go to the EU parliament for lawmaker consent, which is seen as highly likely.
US names officials to Loss and Damage Fund [E&E news]
- The U.S has nominated Rebecca Lawlor and Christina Chan to serve as the country's representative on the new Loss and Damage Fund, moving forward the board after a long delay among industrialized countries in naming commissioners, which has slowed the the fund’s formation.
How 5 crucial elections could shape the future of climate action [Nature]
- With more than one third of the world's population taking part in an election in 2024, the results present a major potential turning point in the fight against climate change. Nature highlights some of the major potential effects of elections in the U.S, EU, Indian and elsewhere, including the pace of the U.S energy transition, India's electrical development pathway, and the E.U's angling green deal rollout.
MIT Sloan launches new climate policy center with $25 million investment [MIT-Sloan]
- The MIT Sloan School is investing $25 million to launch a new center focused on providing climate policy research for lawmakers.
Emerging Science
FAIRR releases report on livestock production emission reduction [FAIRR]
- FAIRR has released a new report covering the impact of livestock production on carbon emissions and other negative environmental effects, and provides guidelines on nature-based solutions and targeted investments to reduce the climate impact of livestock.
Field studies suggest enhanced rock weathering sequesters carbon and boosts farm yields [PHYS]
- A four year study in the U.S Corn belt led by University of Sheffield researchers finds that crushed basalt in farmland can increase maize and soybean yields by 12-16%, and remove approximately 3-4 metric tons of carbon dioxide from the atmosphere, per hectare, per year. The study provides a major new datapoint suggesting that enhanced rock weathering on agricultural land could have a major climate impact, while also having agricultural co-benefits.
Including Brazil's mangroves in REDD+ initiatives could sequester 50% more carbon [nature]
- A new study in Nature Communications suggests that the inclusion of Mangrove forests into Brazil's climate mitigation framework could increase the total amount of protected carbon stocks by around 900 million metric tons.