Your Newsletter at a Glance
Note from the author: This week, Ukraine is looking forward with a $40bn plan toward a coal-free steel industry to shape their post-war reconstruction efforts. Ford Motor Co. garners over $9bn in government loans to aid in their EV development and keep pace with competitors like China. There is new research from the World Resources Institute’s Systems Change Lab exploring six shifts that the finance industry can make to help people and the planet thrive, and Deloitte forecasts that the green hydrogen trade will surpass the LNG market by 2030 and reach $1.4tn by 2050.
Nature-based solutions saw increased movement as Gunn Agri Partners received $200mn in funding from CDPQ and CEFC to manage a sustainable agriculture platform, and ag-tech startup N-Drip received $44mn in funding for irrigation efficiency innovation.
Deal Count: This week covers over $75bn in deals and commitments in climate finance and nearly $1bn in NbS around the world. Enjoy the 32 summaries below!
Climate Finance
Deals and commitments above $100mn
Market Watch
Ukraine targets initial $40bn for 'Green Marshall Plan' [Reuters]
- Ukraine is seeking up to $40 billion to fund the first part of a "Green Marshall Plan" to rebuild its economy, including developing a coal-free steel industry. Politicians and financiers will discuss short-term funding issues as well as look at long-term reconstruction efforts. Giving the figure of $40 billion for an initial phase of reconstruction, the first focus would be the iron and steel industry. The sector contributed around 10% of Ukrainian GDP in 2021, a third of export revenues and employed around 600,000 people. It also accounted for 15% of the country's carbon emissions and there is now an opportunity to build an industry driven by renewable energy.
Ford gets $9.2bn to help US catch up with China’s EV dominance [Bloomberg]
- A US government program designed to finance future energy businesses is issuing a conditional $9.2 billion loan to Ford Motor Co. for the construction of three battery factories. The loan — by far the biggest government backing for a US automaker since the bailouts in the 2009 financial crisis — marks a watershed moment for President Joe Biden’s industrial policy meant to help American manufacturers catch up to China in green technologies. The new factories that will eventually supply Ford’s expansion into electric vehicles are already under construction in Kentucky and Tennessee through a joint venture called BlueOval SK, owned by the Michigan automaker and South Korean battery giant SK On Co. Ford plans to make as many as 2 million EVs by 2026, a huge increase from the roughly 132,000 it produced last year.
German coal miner, LEAG, to invest $1.6bn in green energy [Bloomberg]
- Germany’s second-biggest coal miner plans to invest €1.5 billion ($1.6 billion) in renewable energy at one of its lignite operations as the government increases pressure to phase out fossil fuels. LEAG will develop 7 gigawatts of wind and solar by 2030 at the Boxberg opencast mine, with the first gigawatt of generating capacity commissioned in four years time. That will be built alongside 3 gigawatt-hours of energy storage and 2 gigawatts of hydrogen production.
Research
- A new report released by the Deloitte Center for Sustainable Progress (DCSP) highlights the growing market potential of green hydrogen as a reliable and sustainable energy source. The report, titled “Green hydrogen: Energizing the path to net zero. Deloitte’s 2023 global green hydrogen outlook,” predicts that the market for green hydrogen will surpass the value of the liquid natural gas (LNG) trade by 2030 and reach a staggering $1.4 trillion per year by 2050. The report emphasizes the role of green hydrogen, produced through the splitting of hydrogen atoms from water molecules using renewable energy, in driving the transition to a net-zero future.
Six shifts the finance system can make to help planet and people thrive [World Economic Forum]
- Systems Change Lab is tracking six major shifts in the finance sector that can transform how investments are scaled and allocated for a sustainable future. If these transformations are achieved together, they argue it will enable the fundamental changes needed for the planet and people to thrive: Measure, disclose, and manage climate- and nature-related financial risks; scale up public finance for climate and nature; scale up private finance for climate and nature; extend economic and financial inclusion to underserved and marginalized groups; price greenhouse gas emissions and other environmental externalities; and eliminate harmful subsidies and financing.
Nature-based Solutions
Deals and commitments above $1mn
Market Watch
CDPQ and CEFC form $200mn sustainable agriculture platform with Gunn Agri Partners [Mirage News]
- The CEFC and Canadian pension fund CDPQ are creating a new sustainable agricultural platform to drive down emissions and improve sustainability across the sector. The $150 million CDPQ investment in Wilga Farming (the platform) brings substantial new capital to spearhead the investment push needed to help Australian farming decarbonise while also boosting farm production. With an additional $50 million investment from the CEFC, the $200 million platform will be managed by Gunn Agri Partners, a mid-market sustainable agriculture manager with a commitment to improved sustainability across production systems and landscapes.
- Deputy Prime Minister Tran Luu Quang recently signed a decision approving the investment policy of the Sustainable Fisheries Development Project. The project is funded by the World Bank, the Sustainable Trade Initiative (IDH) and World Wide Fund for Nature (WWF). The Ministry of Agriculture and Rural Development was assigned as the project owner. The total project investment capital is estimated to be $115.6 million USD, which is more than 2,600 billion VND. Namely, WB grants an IBRD loan of $83.6 million USD; IDH and WWF grant a loan of $1.61 million USD; the counterpart capital is $30.4 million USD. The project will be implemented over a six-year timeframe.
AgTech startup N-Drip announces $44mn Series C for irrigation innovation [CTECH]
- Israel-based AgTech company N-Drip announced a $44 million Series C round. The company, co-founded by Prof. Uri Shani, Dr. Ariel Halperin and Ran Ben-Or, holds a variety of patents around the world that allow farmers to irrigate their previously flood-irrigated fields using only gravity and no external energy to either filter the water or to propel it across the field. Investors include the Liechtenstein Group, Hamilton Lane, and Natural Ventures as well as investors from previous rounds, Granot Group, Bridges Israel, Kibbutz Ein Harod Ihud, and a group of US-based investors. N-Drip has raised a total of $80 million to date and according to estimates was valued at $200 million in this round.
Research
- In what Finland-headquartered Solar Foods claims is the ‘first time’ in history, a food produced without any connection to photosynthesis and agriculture is now available to the general public. Solar Food’s microbial protein Solein is made from CO2, air, and electricity. The complete protein is produced using a bioprocess whereby microbes are fed with gasses (carbon dioxide, hydrogen, and oxygen), and small amounts of nutrients. Solein can now be used and sold as a replacement of existing proteins in a variety of foods such as alternative dairy and meat, snacks and beverages, etc.
Bayer sees €100bn ($109bn) opportunity in cleaner-farming shift [Bloomberg]
- Bayer AG is seeking to double the sales potential of its crop-science division by tapping opportunities to reduce carbon emissions from farming. The chemicals firm sees more than €100 billion ($109 billion) in possible revenue by the end of the decade from segments adjacent to its core agricultural businesses. These include precision digital tools to reduce fertilizer waste, as well as using living organisms to control pests.
Climate Finance
Deals and commitments above $100mn
Individual Deals & Market Watch
Transgrid to invest $11bn to ready Australian state for 100% renewables [Reuters]
- Australia's most populous state will be ready for 100% renewable energy within a decade under a A$16.5 billion ($11.20 billion) infrastructure investment plan announced by a major grid operator. Transgrid, privatized in 2015, will invest in batteries and other energy storage, as well as 2,500 kilometers (1,553.4 miles) of new transmission lines across an area larger than Texas for "secure operation" of the grid at up to 100% renewables. The company owns and operates over 13,000 km of transmission lines across New South Wales (NSW) state and the Australian Capital Territory. The bulk of the funds, A$14 billion, will be spent on transmission lines to connect new clean energy projects to customers. Roughly A$2.2 billion will be spent on energy storage to secure the grid as coal plants close, including 10GW of batteries. A final A$300 million will be spent on new staff and technology to operate the upgraded grid. The project will be funded by a combination of private investment, government support and user charges.
Gotion High Tech’s $6.4bn battery plant in Morocco [Investment Monitor]
- Gotion High Tech, a China-based manufacturer of lithium-ion power batteries and electric transmission and transformation products, has announced plans to invest $6.4bn (45.5bn yuan) to establish a new 100 gigawatt-hour electric vehicle (EV) battery manufacturing facility in Morocco.
Chinese battery giant CATL seals $1.4bn deal to develop Bolivia lithium [Reuters]
- Chinese battery giant CATL confirmed a $1.4 billion investment to help develop Bolivia's reserves of lithium. The agreement connects CATL, the world's largest manufacturer of electric vehicle batteries, with Bolivia's salt flats that are home to the world's largest lithium resources.
SA, Netherlands, Denmark launches $1bn green hydrogen fund [jacarandafm]
- South Africa and the governments of the Netherlands and Denmark have launched a $1 billion green hydrogen fund in the country's decarbonisation efforts. Netherlands committed to investing $1 billion for the establishment of SA-H2 Fund to mobilize green hydrogen investments. Copenhagen Infrastructure Partners and Mulilo Energy Holdings SA are to invest $200 million to set up a New Funds Market for investments in green energy infrastructure.
- The MoU aims to reinforce strategic and operational collaboration between IsDB, a AAA-rated multilateral development bank from the Global South, and AFD, France’s leading bilateral aid provider. The collaboration will focus on project development and co-financing in developing countries, particularly in Africa. To illustrate their enduring partnership, IsDB and AFD recently co-financed a large water and sanitation project in Cotonou, Benin, with €89 million from IsDB and €40 million from AFD in 2021. They have also jointly committed to financing a large-scale program in Nigeria focused on entrepreneurship, job creation, and support for the development of fast-growing industries.
Blackstone invests further USD $1bn in Invenergy [Renewables Now]
- Funds managed by Blackstone Infrastructure Partners have invested a further USD $1 billion (EUR 915m) in Invenergy’s renewables business to support its continued growth. The new equity investment in Invenergy Renewables Holdings LLC adds to almost USD $3 billion that Blackstone put into the company over the past two years.
TagEnergy closes EUR-570mn ($626mn) green bond issuance [Renewables Now]
- Renewables developer TagEnergy SA announced it has raised EUR 570 million by issuing a dual currency green bond with co-investments from Copenhagen Infrastructure Partners (CIP) and Singaporean institutional investor GIC. TagEnergy said it will use the green bond proceeds to fund its global pipeline of more than 4 GW of renewables. The green bond has been issued in two tranches, one in Australian dollars and one in euro.
Biden will announce $600mn in climate investments during California trip [Reuters]
- President Joe Biden will visit Palo Alto, California and announce over $600 million in climate investments to help coastal communities around the country fight climate change. The investments will be funded by Biden's climate and infrastructure bills and will include a $575 million project to fight rising sea levels, storm surge and tidal hurricanes. It will also include a $67 million investment for California to modernize its electric grid to reduce the impact of extreme weather events such as wildfires.
SoftBank-backed Enpal secures €430mn ($472mn) debt round [sifted]
- German solar startup Enpal has secured a new €430m debt investment, bringing its total debt financing to €1.9bn. Enpal rents out green hardware, including solar panels and heat pumps, to consumers, helping them to avoid hefty installation fees. The company — recently ranked as the fastest-growing energy company in Europe by the FT — says customer numbers tripled to 30k in 2022, and that it’s hit profitability. Enpal has previously raised equity — including a €150m Series C round from SoftBank. Enpal is moving away from VC money and prioritizing securing debt financing. The latest chunk of that comes from BlackRock, ING Germany, DWS and Phoenix Group.
UKRI invests £318mn ($406mn) in Norwich plant and microbial research hub [UKTech]
- The UK’s national research and innovation funding agency is investing nearly £318m into a plant and microbial research hub based at Norwich Research Park, with plans to complete it before 2030. UKRI, a public body, is backing a project that will redevelop the John Innes Centre and The Sainsbury Laboratory across the next seven years. Work at the finished Norwich-based plant and microbial research hub will center around the impact of climate change, sustainable food and human health. The £317.7m funding comes via the UKRI Next Generation Infrastructure programme, part of UKRI’s HP3 scheme to further the country’s efforts in computational biology, structural biology, genetics, live cell imaging and genomics.
£218mn ($280mn) to help UK lead the way on greener air travel [gov.uk]
- Projects to help the UK lead the way on greener air travel and deliver on one of the Prime Minister’s five priorities to grow the economy, are to receive more than £200 million in funding. A total of £218 million combined government and industry funding has been announced to develop new green innovative landing gear, and lower carbon and more efficient aircraft wings, engines and sensors. The funding, being delivered through the Aerospace Technology Institute (ATI) Programme, will secure more high-skilled jobs and increase investment in aerospace technology across the UK. The joint commitment with industry to invest in new aircraft and manufacturing technologies is set to help secure at least £20 billion of further private investment in aerospace in the UK and support over 100,000 jobs.
Canada investing C$350mn ($265mn) to boost drive for sustainable aerospace industry [US News]
- Canada is investing C$350 million ($265 million) to help fund efforts to make the aerospace industry more environmentally sustainable. The focus will be on hybrid and alternative propulsion, aircraft systems, the transition to alternative fuels, and aircraft support infrastructure.
EU launches EUR-225mn ($243mn) green hydrogen fund in Chile [Renewables Now]
- The President of the European Commission, Ursula von der Leyen, launched a EUR 225 million (USD 243m) green hydrogen fund initiative in Chile. The launch of the project was presided over by the European Commission President and Chile’s President Gabriel Boric. It includes a technical assistance programme, with a budget of EUR 4 million each from the EU and the German Federal Ministry of Economics and Climate Protection (BMWK), to improve conditions for promoting green hydrogen in Chile. There will also be a EUR 216.5 million fund which will provide funding for the development of renewable hydrogen production projects. The "Team Europe Renewable Hydrogen Fund in Chile'' includes a EUR 16.5 million grant from the EU’s Latin America and Caribbean Investment Facility and loans of EUR 100 million each from the European Investment Bank (EIB) and German development bank KfW. The fund will be managed by Corporacion de Fomento de la Produccion (CORFO).
- TDK Corporation announced that subsidiary TDK Ventures Inc., its corporate venture capital arm, is expanding into the European market with plans to invest in startups in the region. The company selected London as the site of its first outpost for its quest toward energy transition, electrification, and decarbonization throughout Europe. At the same time, TDK Ventures will initiate its $150mn (USD) multi-LP Fund EX1. The fund will focus on both European and North American-based energy-transformation startups in Seed and Series A stages.
DOE awards $135mn to 40 projects focused on decarbonizing industrial sector [ExecutiveGov]
- Forty research projects will receive a total of $135 million from the Department of Energy to fund technologies working toward the decarbonization of the industrial sector. The grants will be awarded through DOE’s Industrial Efficiency and Decarbonization Office, and will concentrate on sectors such as chemicals, iron and steel, food and beverage, cement and concrete and paper and forest products.
CubicPV bags US $103mn for 10GW US wafer manufacturing plans and perovskite research [PVTECH]
- US solar manufacturer CubicPV has received US$103 million in equity financing to support its plans to develop a US silicon wafer production base. The first, US$33 million tranche of the investment will be released immediately, with the second US$70 million tranche subject to specific project milestones. SCG Cleanergy (a wholly owned subsidiary of SCG) spearheaded the funding, with contributions from Hunt Energy Enterprises and Breakthrough Energy Ventures, all of which are part of CubicPV’s shareholder base.
Research, Frameworks, & Case Studies
- This research argues that by helping achieve emissions targets more inexpensively than expected, emissions trading systems can lower political resistance to more ambitious targets, enabling deeper and faster cuts in emissions over time. Using a dynamic global partial-equilibrium carbon market model, they quantified cost savings under scenarios for emissions trading within and across countries, as well as the corresponding potential to escalate reductions if those cost savings were translated into greater mitigation. They found global use of carbon markets could allow the world to nearly double climate ambition relative to current Paris pledges (NDCs) over 2020–2035, without increasing total costs compared to a base case without international markets. They also found that since protecting tropical forests offers so much low-cost mitigation potential, linking reduced deforestation to an international carbon market drives a majority of the potential ambition gains across the modeled scenarios. They argue that international markets, including deforestation, play a potentially even more critical role as global ambition increases, with roughly double the volume and ten-fold the value of international transactions if countries’ Paris pledges scale up to limit warming to 2°C. Under this scenario, global use of carbon markets lowers costs by two thirds, enabling one third more reductions for the same cost as without international markets, a gain sufficient to keep options open for limiting warming to 1.5°C. They say that high-integrity approaches for international market cooperation thus merit significant policy attention as means of closing the global emissions gap.
- The annual value of air pollution removal by nature was £145 million in Scotland in 2019, according to a report by the Scottish government which has valued the total asset value of natural capital in the country at £230 billion. The Scottish Natural Capital Accounts 2023 report estimates the quantity and value of “services” supplied by Scotland's natural capital, using new experimental statistics. It says that the total asset value of natural capital in Scotland (that can currently be valued) was an estimated £230 billion in 2019 - representing 13% of the total UK asset value, with the annual value of ecosystem services coming to £15 billion in 2019. That’s 30% of the total UK annual value. The natural capital accounts are reported under three service categories: “provisioning services”, which create products such as food, water and minerals; “regulating services” such as air pollution removal, carbon sequestration, noise mitigation, or urban cooling; and “cultural services”, such as the recreational use of nature.
Nature-based Solutions
Deals and commitments above $1mn
Individual Deals & Market Watch
Portugal to swap $153mn Cape Verde debt for nature investments [Yahoo]
- Portugal plans to swap the entire 140 million euro ($152.91 million) debt it is owed by Cape Verde for investments in the archipelago's environmental and climate fund. Such "debt-for-nature" swap deals are a way to resolve the dilemma of how and who will foot the bill for actions to "counteract the impact of climate change and to accelerate the transition energy of developing countries," Costa said in a joint address in Lisbon with Cape Verde's Prime Minister Ulisses Correia e Silva to announce the plan.
Australian timber plantations boosted with $73mn in grants [The National Tribune]
- The Albanese Government is strengthening Australia’s sustainable timber supply, with $73.76 million in federal grants to establish new forestry plantations. The Support Plantation Establishment program will provide grant funding over four years to help establish new long-rotation softwood and hardwood plantation forests. The program will seek to establish up to 36,000 hectares of new plantation across Australia. Minister for Agriculture, Fisheries and Forestry Murray Watt said the program further emphasizes the Albanese Government’s commitment to supporting the forestry industry and regional communities, while reducing their carbon footprint.
- With $40 million in funding, Los Angeles-based startup Omeat has emerged from stealth with a “solution” to scaling cultivated meat production involving the humane extraction of growth factors and other components from “healthy, living cows.” Founded two years ago by tissue engineer Dr. Ali Khademhosseini, Omeat raised $3.5 million in seed funding in 2021 and $36.5 million in series A funding in 2022 backed by S2G Ventures, Google Ventures (GV), Bold Capital Partners, Tyson Ventures, Rethink Food, Trailhead Capital, and Cavallo Ventures. It is currently building a pilot plant in Los Angeles that will be operational later this year.
- The State of California will roll out a first-of-its-kind approach to curbing the state’s catastrophic wildfire problem by providing new protections for prescribed fire and cultural burning practitioners. The $20 million allocated for the “Prescribed Fire Liability Claims Fund Pilot” will cover losses in the rare instance that a prescribed or cultural burn escapes control. The use of prescribed fire and cultural burning—sometimes collectively called “good” or “beneficial” fire —is a key component of wildfire risk management in California. These projects reduce hazardous fuels, help restore ecological and cultural values, and make communities safer and ecosystems more resilient to wildfire.
- Guardian Agriculture has raised a $20 million Series A round led by Fall Line Capital to expand its autonomous drone technology to farms across the US and ramp-up manufacturing of its SC1 aircraft. The raise brings Guardian’s cumulative funding to $35 million. Founded in 2017 with a focus on large-scale agriculture, the Massachusetts-based company has more than $100 million in pre-orders and will begin commercial operations to support customer (and investor) Wilbur-Ellis in Salinas Valley, California, this summer. They created the first Electric Vertical Take-Off and Landing (eVTOL) company with Federal Aviation Authority (FAA) approval to operate commercially nationwide.
NFWF announces record $18mn in conservation grants to restore iconic longleaf pine ecosystem [Yahoo]
- The National Fish and Wildlife Foundation (NFWF) announced $18 million in new conservation grants from the Longleaf Landscape Stewardship Fund (LLSF) to restore, enhance and protect longleaf pine forests in nine southern states. This year’s grant slate, the largest in the program’s history, will leverage more than $14.7 million in matching contributions to generate a total conservation impact of $32.7 million.
Israel to expand alt-protein and fermentation scope with US$13.8mn investment [nutrition insight]
- The Israel Innovation Authority has selected YDLabs, a food tech fermentation R&D center, to establish permanent microorganism fermentation labs for the food industry. The Authority will invest up to 50 million NIS (New Israel Shekel) (US$13.8 million) in infrastructure to serve all food tech companies using fermentation for research, development, and production of their products.
New $8.2mn project launched to support cocoa farmers in Indonesia [Confectionary News]
- The United States Agency for International Development (USAID) has announced a new project to promote sustainable cocoa and coffee production in Indonesia with The Hershey Company, Rikolto, the Indonesian government, and PT. This project is an $8.2mn joint investment from the partners that will aim to assist 6,500 cocoa and coffee farmers in increasing their yields by 25% while conserving 14,000 hectares of the watershed and riparian buffers by 2025.
Adamo Foods secures £1.5mn ($1.9mn) in fresh funding for its mycelium meat [green queen]
- U.K.-based Adamo Foods says it is crafting ecologically viable alternatives to meat whole cuts. The venture’s vision is to fill what it sees as a gap in the vegan meat market, namely the dearth of high-quality alternatives resembling whole pieces of meat, such as steaks, filets, and chops. The company’s first successful funding initiative was a Pre-Seed investment led by SFC Capital, a prominent seed-stage investment firm in the U.K. and the third venture capital to back Adamo Foods. Adamo also received two significant grants from Innovate U.K. under the ‘Better Food for All’ and ‘Novel Low Emission Food Production Systems’ competitions.
- Cascadia Seaweed, a seaweed cultivator based in Sidney, British Columbia, Canada that produces products for crop and cattle farmers, has secured CAD 1.5 million (USD $1.1 million, EUR 1 million) in funding from the British Columbia Centre for Innovation and Clean Energy (CICE). The funds will be allocated toward seaweed commercialization to reduce greenhouse gasses.
Research, Frameworks, & Case Studies
Climate tech innovation hub forms in Scottish glen [GVS]
- The James Hutton Institute, an independent research organization, has launched the Climate Innovation Hub at Glensaugh, a remote Scottish hill farm. The hub aims to provide a proving ground for farmers and land managers to test and develop new climate technologies. It offers technology developers access to the institute’s 1,000 ha research farm, including offices, conference facilities, and laboratories. The hub has already welcomed its first tenant, carbon capture start-up UNDO, which is trialing a technology that aims to enrich soil and help sequester large volumes of carbon dioxide by spreading crushed basalt rock onto agricultural land. The hub is funded by the Macaulay Development Trust (MDT), a charity that supports research into sustainable use of land and natural resources.
- The University of Rhode Island Research Foundation has been awarded a $2.4 million grant by the Office of Naval Research to develop and advance blue economy, marine and energy technologies and opportunities that strengthen the Rhode Island economy and its workforce. The funding establishes a new initiative, “RISE-UP” (Resilient Innovative Sustainable Economies via University Partnerships), in collaboration with the University of Alaska, Fairbanks and the University of Hawai’i.
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