Your Newsletter at a Glance
Commentary by C4C
The EU finalizes its blockbuster nature restoration law to restore 20% of Europe’s land and sea. The Italian government invests $1.8 billion in catalyzing agro-voltaics. Blackrock invests $550 Million in Occidental's direct air capture plant. Developer Aypa secures $550M in financing for battery storage projects. S2G finds that ocean-based funds will raise $4B this year. Manulife is almost half way to its $500M target on an inaugural carbon+forest investment fund. KKR closes a $2.8B impact fund, their second.
Policy and regulatory changes:
- Former FARC guerillas spearhead a new initiative to reforest the Colombian Amazon.
- India releases initial rules for an intensity based carbon emissions trading system.
- Spain’s agriculture ministry plans to analyze soil carbon sequestration for a future credit system.
Changes in Climate and Nature Finance:
- UNEP warns that fossil fuel production is still rising at an unsustainable pace that will put climate targets like 1.5C out of reach.
- Banks are beginning to seek insurance for legal fallout related to investment in companies and funds with misleading green claims.
Emerging Research:
- Research published in Frontiers in Forestry shows that mixed plantings store more carbon than monocultures.
- A new study from the UN FAO finds that the health, environmental and social costs of the global food system total more than $12.7 billion yearly.
Research and Knowledge Sharing
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Climate
Governments are all in on fossil fuel production despite commitments to Net-Zero, new UNEP report warns [UN]
- Contrary to pledges to cut fossil fuel production, government policies worldwide will increase in global coal production until 2030, while global oil and gas production will continue growing until at least 2050, a new report from the UN environment agency (UNEP) revealed. The research piece, originally conducted by Stockholm Environment Institute (SEI), Climate Analytics, E3G, International Institute for Sustainable Development (IISD), and the UN Environment Programme (UNEP), urges countries to aim for a near total phase-out of coal production and use by 2040, and at least a 75 per cent reduction in oil and gas production by 2050.
New UK and Germany partnership to boost renewable energy and bolster energy security [GOV.UK]
- A new partnership between the UK and German governments has been agreed to help secure safe, affordable and clean energy for consumers in both nations for the long term and bolster energy security. The energy and climate partnership sees both countries commit to: enhancing cooperation in renewables; sharing industry knowledge and expertise to improve the exploration of carbon capture; strengthening and promoting regional and global energy security; and sharing best practices and lessons learned.
Just 4% of top companies meet UN climate target guidelines, study says [Reuters]
- According to a new report released by Net Zero Tracker, Half of the world's 2,000 biggest listed companies have set a target to get to net-zero emissions by mid-century, but just a fraction meet tough United Nations guidelines for what constitutes a quality pledge. The independent data consortium, which includes institutions such as Oxford University, said corporate targets from Forbes2000 index companies had jumped 40% to 1,003 in October 2023, from 702 in June 2022, covering two-thirds of revenues, some $27 trillion; and yet just 4% of of the 1003 companies that pledged net zero by mid-century have targets that align with UN's Race to Zero guidelines. Of those to set a target, just 37% had one that covered their Scope 3 emissions, or those tied to a company's value chain. Just 13% had a quality threshold for the use of carbon offsets.
Indian govt releases draft rules for planned intensity-based emissions market [Carbon Pulse]
- The Indian government released draft rules for its planned compliance carbon market, eyeing an intensity-based scheme rather than one with an absolute cap on greenhouse gas emissions.
Bankers Seek Legal Cover After Backing $1.5 Trillion of ESG Debt [Bloomberg]
- Risks are surfacing in the sustainability-linked loan market: bankers servicing one of the world’s biggest ESG debt markets are now actively seeking legal protections to guard against the potential greenwashing allegations that may be ahead. SLL business has mushroomed amid a lack of regulatory controls
Here’s who wants to run the US's $14B ‘green bank’ [Politico]
- Five groups are angling to lead EPA’s largest climate grant program in history, each pitching a different plan to convert billions of federal dollars into lasting change for people and the planet. EPA has said it will only choose two or three applicants to run the National Clean Investment Fund (NCIF) — a $14 billion lending facility sometimes dubbed the national green bank. The stakes are high: NCIF is the largest program in the Greenhouse Gas Reduction Fund (GGRF), with a mission to provide affordable financing for tens of thousands of clean technology projects.
Nature-based Solutions
Spain’s agriculture ministry to analyze soil carbon for future credit system [Carbon Pulse]
- Spain's agriculture ministry to analyze soil carbon for a future credit system. Spain's Ministry of Agriculture, Fisheries and Food (MAPA) has embarked on an extensive project to analyze the carbon content in agricultural soils across 16,000 plots.
Ex-FARC members aim to restore 1 million native trees in the Colombian Amazon [Mongabay]
- Former fighters in the Revolutionary Armed Forces of Colombia (FARC) are working to restore the Colombian Amazon through a cooperative called Comuccom. Their goal, despite ongoing conflicts and danger, is to plant 1 million native trees to counteract deforestation from illegal mining, logging, ranching and coca cultivation. Those involved in the effort, many of whom were just children when they joined FARC, have already planted 125,000 trees; another 250,000 trees are ready in their cooperative nursery.
The World’s Broken Food System Costs $12.7 Trillion a Year [Wired]
- The hidden costs of the global food system are equivalent to 10 percent of global GDP, according to new analysis from the United Nations' FAO. The report analyzed the costs to health, society, and the environment embedded in the current food system. The biggest impact in monetary terms is on health: Globally, 73 percent of all the hidden costs accounted for by the FAO were associated with diets that led to obesity or non-communicable diseases like diabetes and heart disease. The next biggest impact in monetary terms was to the environment, accounting for more than 20 percent of quantified hidden costs. Read the original study here, or use the link above for a quick 6 minute listen.
Ocean-based startups ride a wave of funds seeking opportunities in the blue economy [Impact Alpha]
- Less than a decade ago, the number of ocean-focused impact funds could be counted on one hand. Now, a wave of ocean-dedicated private investment funds are emerging to supercharge the underfunded sustainable ocean economy. The number of ocean-focused funds has quadrupled since 2018 and capital invested in the sector has more than quintupled from $700 million in 2021 to close to $4 billion in 2023, according to Kate Danaher, who manages S2G Ventures’ $100 million Ocean and Seafood Fund.
EU Makes Deal to Advance Controversial Nature-Restoring Law [Bloomberg]
- The European Union clinched a deal to advance one of the most controversial aspects of its green agenda: how to restore nature that has disappeared due to human activity. Negotiators from the European Parliament and member states agreed on a plan to return at least 20% of the bloc’s land and sea back to its original state, according to a post on social media. In an effort to win over critics, it also includes provisions to ensure the bloc’s food security remains robust and that renewables can still be rolled out on protected land.
Young mixed planted forests store more carbon than monocultures—a meta-analysis [Frontiers in Forests and Global Change]
- New research finds that aboveground carbon stocks in mixed planted forests were 70% higher than the average monoculture, 77% higher than commercial monocultures, and 25% higher than the best-performing monocultures, although the latter was not statistically significant. The 17-deep coalition, led by The University of Oxford and University of Michigan Ann Arbor, suggests that diversification could be a very promising solution for increasing the carbon sequestration of planted forests and represent a call to action for more data to increase confidence in these results and elucidate methods to overcome any operational challenges and costs associated with diversification.
Climate Finance ≥ $100M
Commitments
US invests $2B for lower-carbon construction at federal buildings [Reuters]
- The Biden administration said it will invest $2 billion in 150 federal building projects across 39 states that use materials that minimize carbon emissions, its latest effort to tackle climate change through government purchasing power. The General Services Administration will prioritize the purchase of asphalt, concrete, glass and steel produced and disposed of with lower levels of associated greenhouse gas emissions that meet a standard for environmental products.
Deals
KKR’s second impact fund closes at $2.8B, more than double size of first [Impact Investor]
- KKR, a US-based alternative asset manager, closed its Global Impact Fund II to new investors after raising $2.8bn. The firm’s first global impact fund, which launched in 2018, raised $1.3bn from investors, making it one of the biggest of its kind at the time. KKR’s second impact fund, which is aimed at addressing social and environmental problems, received “strong backing from a diverse group of new and existing global investors, including public pensions, family offices, insurance companies, and other institutional investors”, KKR said in a press release.
EC allows Italy to extend €1.7B ($1.8B) in state aid to agrivoltaics [Renewables Now]
- The European Commission (EC) has given the go-ahead to Italy for its EUR-1.7-billion (USD 1.82bn) state aid scheme targeting dual-use projects combining solar power generation and agricultural activities, better known as agrivoltaic plants.
BlackRock set to invest $550M in Occidental direct air capture project [Financial Times ]
- BlackRock is set to invest $550mn into the world’s biggest direct air capture project, which is being developed by Occidental Petroleum, in a sign of growing investor confidence in the nascent technology. The companies said they would form a joint venture to develop Stratos, a project under construction in west Texas that aims to extract carbon emissions from the atmosphere.
AYPA POWER SECURES $550M PORTFOLIO FINANCING FOR BORDEN COUNTY AND CALD BATTERY STORAGE PROJECTS [Cision]
- Aypa Power, a Blackstone portfolio company and a leading independent power producer (IPP) specializing in the development, construction and operations of utility-scale energy storage and hybrid renewable energy projects, has successfully closed a $550 million portfolio debt and tax equity financing, with First Citizens Bank & Trust Company, Nomura Securities International, Inc., National Bank of Canada and MUFG Bank, LTD. serving as lenders, and U.S. Bancorp Impact Finance as the portfolio's tax equity investor.
China's Trina Solar lines up $420M expansion in Vietnam [Deal Street Asia]
- Chinese solar panel maker Trina Solar is planning to invest an additional $420 million in Vietnam’s northern province of Thai Nguyen, raising its total investment in the country to nearly $900 million, the provincial government said.
Strata Clean Energy Secures a $300M Revolving Credit Facility to Support Expansion of Vertically Integrated Clean Energy Platform [Strata]
- Strata Clean Energy announced the closing of a $300 million new revolving loan and letter of credit facility to expand Strata’s operational fleet and accelerate the commercialization of its diversified 17+ GW development pipeline. Nomura Securities International, Inc. led the financing, acting as Sole Coordinating Lead Arranger, Bookrunner, and Nomura Corporate Funding Americas, LLC as Administrative Agent, with First Citizens Bank and ING Capital as Joint Lead Arrangers alongside five other participant banks. Notably, this loan adheres to a Green Financing Framework in accordance with the 2023 Loan Syndications and Trading Association Green Loan Principles.
Arevon Completes Financing on Nation's First Utility-Scale Solar Peaker Project Using the IRA's Transferability Provision ($529M) [PR Newswire]
- Arevon Energy, Inc. announced it has closed financing on the Vikings solar-plus-storage project with a combination of debt financing and tax credit transfer. Arevon secured a commitment with J.P. Morgan to purchase $191 million of investment tax credits and production tax credits, among the nation's first transactions announced to date that leverage the Inflation Reduction Act's transferability provision. The additional $338 million debt facility was financed with MUFG, BNP Paribas, Sumitomo Mitsui Banking Corporation, and First Citizens Bank, who acted as Coordinating Lead Arrangers. National Bank of Canada also participated as a lender.
$155M World Bank Loan to Expand Equity Finance for the Greening of Turkish Firms [World Bank]
- The World Bank Board today approved a $155 million loan for the greening of firms through equity financing and mobilized private capital, and expand climate financing in Türkiye’s capital markets. The funds will be channeled by the Industrial Development Bank of Türkiye (TSKB) who will use them to partially capitalize a Türkiye Green Fund (TGF). The TGF will provide equity financing to green and greening companies. It will be managed by Maxis Private Equity Portfolio Management A.Ş. (Maxis), one of Türkiye’s largest asset management companies and a Project Implementing Entity under the Project.
Janom-owned firm sells Finnish wind parks to Aquila for €120M ($128.6M) [Renewables Now]
- Tuulivoimayhtio Pohjoistuuli Oy, owned by Central European cleantech investment group Janom, has sold wind farm assets in Finland worth a total of EUR 120 million (USD 128m) to German investment and asset development company Aquila Capital. The transaction concerns the Soidinmaki and Tyrinselka wind farms with a combined capacity of 70 MW. Tuulivoimayhtio Pohjoistuuli will continue to manage both facilities for Aquila Capital.
Octopus Energy Generation’s Sky fund surpasses £1B mark with new investment from Ireland's sovereign wealth fund ($97.8M) [Octopus Energy]
- Ireland Strategic Investment Fund commits £80m to Octopus Energy Generation's Sky Fund. With this latest investment, the Sky fund has now raised over £1 billion, as it accelerates the drive towards a green energy system globally. ISIF, managed and controlled by the National Treasury Management Agency (NTMA), is a sovereign development fund with a unique mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. So far, ISIF has committed over €500 million as part of its €1 billion climate investment program.
Nature-based Solutions ≥ $1M
Commitments
FMO to provide $90M credit package to Loc Troi Group [Vietnam Investment Review]
- In a bid to advance sustainable agriculture, Loc Troi plans to roll out an integrated model of pre-financed contract farming for rice farmers. FMO, as lead arranger, intends to provide up to $90 million through two senior secured facilities to finance: expansionary capex to upgrade rice mills and warehouses in group subsidiaries and associates; and working capital to support the Integrated Model programme.
Asia-Pacific: ADB and GEF introduce natural capital fund to foster environmental conservation ($15M) [ANI News]
- The Asian Development Bank (ADB), in partnership with the Global Environment Facility (GEF), has unveiled the inception of the Natural Capital Fund (NCF), a concessional fund aimed at bolstering projects that bolster food security while simultaneously safeguarding and reviving natural capital in ADB's developing member countries (DMCs). GEF has pledged USD 15 million in support of the NCF.
US-backed nature fund latches onto private sector, green bonds ($10M) [Carbon Pulse]
- The Americas Partnership Fund for Nature will receive an initial $10M from the US government, the White House said last week before launching the financing vehicle officially via a fact sheet. Housed in the Inter-American Development Bank, the initial commitment aims at mainstreaming climate, biodiversity, and nature-based solutions into regional economic development.
Welsh £4.6M ($5.6M) boost to tackle flooding with nature-based solutions [Wales Farmer]
- The Natural Flood Management Accelerator Programme is part of a Welsh Government commitment to implement nature-based flood management systems. The two-year scheme, which will involve farmers, foresters, and other land managers, will fund 23 projects across eight different risk management authorities and is expected to reduce the flood risk to around 2,000 properties.
Deals
Barbados 'debt-for-climate' swap backed by $300M EIB, IADB guarantee - statement [Reuters]
- The European Investment Bank (EIB) and Inter-American Development Bank (IDB) are providing a $300 million guarantee for Barbados to execute a "debt-for-climate" swap to upgrade water infrastructure, the European Commission said on Friday. The deal will enable the Caribbean island nation to issue the equivalent of $295 million of sustainability-linked debt, with the EIB and IDB each providing $150 million guarantees, the Commission said in a statement.
Manulife Investment Management Announces Close on up to $224.5M in Commitments to Forest Climate Fund [Cision]
- Manulife Investment Management,\ with nearly $15 billion in assets under management in timberland and agriculture combined, today announced the initial close of Manulife Forest Climate Fund LP1. In this fund focused on sustainably managed forests, carbon sequestration is prioritized over timber production. Manulife has secured commitments of $224.5 million towards its $500 million target with U.S. and certain global institutional investors.
Carbon farming platform bulks up to 150,000ha with $32M deal [Financial Review]
- Carbon farming platform Pastoral Partners Australia has struck its biggest deal since launching last year, after paying about $32 million for beef cattle producer Vaughn Houlahan’s Honeymah and Wongalee aggregation in Western Queensland. Pastoral Partners, owned by New Zealand infrastructure investor Morrison & Co, sets itself up to invest in and improve grazing farmland, and generate revenue from carbon projects.
Letoon Holding Ltd Secures Strategic £20M ($24.5M) Capital Commitment from Nimbus Capital [Businesswire]
- Letoon Holding Ltd has secured a £20 million investment from Nimbus Capital, enabling LHL to establish itself as a global leader in the recovery of high value added ingredients from vegetable waste and botanical products for use in the pharmaceutical, nutraceutical, cosmetic and food industries.
Aigen's $12M Series A Unleashes True-Solar Agriculture Robots []
- Aigen, an AI-driven robotics company, closed $12 million in Series A financing from leading investor ReGen Ventures along with NEA, Cleveland Avenue, Incite, and Susquehanna Private Equity Investments LLLP. The funding expands Aigen's manufacturing capacity to meet high pre-order demand and create a new agricultural era that is both sustainable and scalable. Founded in 2020, Aigen is the only agricultural technology company developing truly solar-powered autonomous robots for crop management without chemicals or fossil fuels. The Aigen Element robots combine LTE connectivity with the cutting edge of AI, ML, solar, and battery technology to create a reliable, sustainable product that saves farmers time and money.
Morocco Launches $11.8M Irrigation Project in Boujdour [Morocco World News]
- Morocco’s Minister of Agriculture Mohamed Sadiki inaugurated on Saturday the first phase of the Oudiyat Tious hydro-agricultural development project in Boujdour. In a statement to the press, Sadiki said that the project is in line with the new development model for the Southern Provinces and the implementation of the new agricultural sector development strategy “Generation Green.”
The Rockefeller Foundation Announces Over $11M Towards Climate Solutions, including Nature-based solutions [The Rockefeller Foundation]
- First round of funding from the Foundation’s USD 1 billion climate strategy goes to 25 grantees to improve global food and health security, curb coal, increase solar energy access, and more.
Zambia’s Good Nature Agro raises $8.5M in a Series B round led by Goodwell Investments [Innovation Village]
- Good Nature Agro (GNA), a Zambian tech-enabled for-profit social enterprise for smallholder farmers, has secured $8.5 million in a Series B funding round led by Goodwell Investments. Other participants in the round include social impact investing cooperative Oikocredit and Global Partnerships/Eleos Social Venture Fund (GP SVF). Goodwell Investments also led a $2.1 million Series A funding round in 2020. The business strategy currently supports 30K farmers across the southern African region by providing a comprehensive package that includes: the provision of agricultural inputs, financing for these inputs, intelligent and minimal use of fertilizers, education on climate-resilient farming practices, and an assured marketplace for premium crops.
$6.9M from USDA to McCain Foods for soil healthy and climate-smart potatoes [Cision]
- McCain Foods USA was awarded $6.9 million in funding through the U.S. Department of Agriculture (USDA)'s Regional Conservation Partnership Program (RCPP), which will be used as part of an "Improving Soil Health in Potato Supply Chains" project. The entity, along with its partners Campbell Soup Company and the Soil Health Institute (SHI), will help potato farmers implement soil health and climate-smart agriculture practices and systems on more than 6,000 acres in Wisconsin and Maine.
Italian startup Dreamfarm secures C5M ($5.4M) investment for plant-based cheese alternatives [Tech EU]
- Dreamfarm, an Italian startup specializing in plant-based cheese alternatives, announced a total investment of €5 million. The investment comes from two accomplished entrepreneurs with a track record of success in the food industry, a serial entrepreneur who founded Italiana Ingredienti, Campus, and Hi-Food, and Francesco Mutti, the owner and CEO of the Mutti Group.
InPlanet Raises $4.6M To Accelerate Enhanced Weathering In The Tropics [Carbon Herald]
- InPlaneT, a German-Brazilian carbon dioxide removal (CDR) company, utilizing nature’s ability to store carbon through an enhanced rock weathering process, has announced it raised a €4.3 million ($4.6 million) Seed round in October 2023 to accelerate its mission to remove gigatons of CO2 from the atmosphere.
BiomEdit, a startup JV of biotech Ginko Bioworks and animal health major, Elanco raises $4.5m to improve emissions profile of smallholders' cattle in Africa and Southern Asia [AgFunder News]
- Animal health biotech company BiomEdit has received a $4.5 million grant from the Bill & Melinda Gates Foundation. The two will develop microbiome-based solutions that reduce methane emissions for beef and dairy cattle and enhance feed efficiency. The project will focus on smallholders and pastoralists in sub-Saharan Africa and South Asia with the goal of also improving these groups’ livelihoods. Indiana-based BiomEdit was launched in 2022 by Ginkgo Bioworks and Elanco.
Lucent Bio Raises Over $3.6M in Funding [Finsmes]
- Lucent Bio, a Vancouver, Canada-based agricultural technology company, raised over $3.6M in funding. The round was led by PacifiCan. Led by CEO Michael Riedijk, Lucent Bio is a leader in the sustainable agriculture industry. Nutreos, their innovative seed treatment technology, is a biodegradable and micro-plastic free seed coating designed to promote strong germination, vigor, and crop establishment, supporting the transition of traditional agriculture inputs to sustainable alternatives.
Dublin-based Positive Carbon secures €2.3M ($2.5M) to revolutionize food waste management in the UK and EU [EU Startups]
- Positive Carbon announced a successful €2.3 million seed funding round led by Business Venture Partners’ (BVP) EIIS Fund. The round also saw the active participation of Heartfelt_, Gateway Ventures, and Enterprise Ireland. Positive Carbon’s food waste sensors represent help manage food waste within commercial kitchens by meticulously tracking, tracing, and facilitating the elimination of food waste.