Your Newsletter at a Glance
Note from the author: In this week’s issue, Brazil issues their draft regulatory framework for a national carbon market and Malaysia issues their energy/climate transition plan. India continues to be a headliner with another large deal in climate at $24.2bn, totaling almost $35bn over the last three weeks.
Germany deals total almost $3.2bn comprising regenerative ag, energy through commitments from Bayer, acquisitions from Asterion, and loans from Deutsche Bank.
Additional highlights:
- Danish LEGO Group pledges $1.4bn to achieve net-zero
- Government of Denmark donates $21.9mn towards Amazon protection
- Mexico-based Veloz Bio brings in $4mn
- New research finds causation between GHG emissions and Polar Bear vulnerability
- More data shows that the Amazon is starting to become a carbon source instead of a sink, and how researchers are responding.
Deal Count: This issue covers $37bn in deals and commitments to climate finance around the world, while Nature-based solutions fall short of $1bn. Read more details in the 36 deal and research highlights below.
Climate Finance Highlights
Deals and commitments above $100mn
Market Watch
India's ONGC to invest $24.2bn to meet net-zero emissions goal [Reuters]
- India's top explorer Oil and Natural Gas Corp (ONGC.NS) plans to invest 2 trillion rupees ($24.17 billion) on clean energy projects in order to meet its 2038 net-zero carbon emissions goal. The company, which accounts for about two-thirds of India's oil production and about 58% of gas, is looking to boost its hydrocarbon output while strengthening its presence in the clean energy sector.
- FEMA announces the selections for nearly $3 billion in climate resilience funding through two competitive grant programs to help communities across the nation enhance climate and disaster resiliency. The nationwide funding includes $1.8 billion for critical resilience projects funded by the Building Resilient Infrastructure and Communities (BRIC) national competition and $642 million for Flood Mitigation Assistance (FMA) community-scale flood mitigation projects.
Stellantis (STLA) invests $100mn in CTR's Hell's Kitchen project [Yahoo! Finance]
- TLA and Controlled Thermal Resource Holdings Inc. (CTR) announce an investment of $100 million from Stellantis for developing the latter’s Hell’s Kitchen project. This is the world’s largest geothermal lithium project, with a production capacity of up to 300,000 metric tons of lithium carbonate equivalent each year. The project, located in California’s Imperial County, will recover lithium from geothermal brines using renewable energy and steam to produce battery-grade lithium products in a fully integrated process, eliminating the need for evaporation brine ponds, open pit mines and fossil-fueled lithium processing.
Research
Brazilian government presents proposal for a regulated carbon market [Reset]
- The government presents its version of the bill that establishes a regulated carbon market in the country to impose mandatory limits on greenhouse gas emissions for sectors and companies. It foresees the creation of a cap-and-trade regime similar to the one in the EU since 2005. Carbon assets are defined as financial securities assets – under the financial regulator CVM’s umbrella – which allows the creation of new financial products. The rights of indigenous and traditional populations, often affected by voluntary market carbon credit generation projects, are also contemplated in the text.
Solar powered irrigation: A game-changer for small-scale farms in sub-Saharan Africa [Science Daily]
- A new study from IPO: Environmental Research Letters finds that standalone solar photovoltaic irrigation systems have the potential to meet more than a third of the water needs for crops in small-scale farms across sub-Saharan Africa.
Investors are helping drive oil money to climate tech [Nasdaq]
- Climate-focused institutional and activist investors are continuing to make their voices heard inside publicly traded oil and gas and energy companies, applying pressure on climate risk management, energy transition and investment in climate tech. While overall VC funding to climate tech dropped from 2021 to 2022, funding from oil and gas majors actually increased, according to Pitchbook. “More than one-fifth of all VC investment into climate-tech startups in 2022 was in deals with participation from oil and gas companies: $6.79 billion out of a total $36.47 billion.”
- The Twelfth Malaysia Plan, spanning 2021-2025 (Twelfth Plan), articulates the Malaysian government's commitment to achieve net-zero GHG emissions by 2050. Concurrently, the National Energy Policy 2022-2040 (DTN) lays the foundation for an equitable energy transition that is fair and inclusive.
Nature-based Solutions HighlightsDeals and commitments above $1mn
Market Watch
Bayer to invest EUR 220mn ($237.5mn) in new R&D facility at its Monheim site [Bayer]
- Bayer significantly strengthens its commitment to innovation in “regenerative” agriculture with a EUR 220 million investment in research and development (R&D) at its Monheim site. Its principal focus will be on developing the next generation of crop protection chemicals with better environmental and human safety performance.
New global biodiversity fund launched in Vancouver ($160mn) [GEF]
- The Global Environment Facility’s Seventh Assembly in Canada saw representatives of 185 countries agree to launch a new fund for biodiversity seeking blended funding from governments, philanthropy, and the private sector. The Global Biodiversity Framework Fund (GBFF), designed to mobilize and accelerate investment in the conservation and sustainability of wild species and ecosystems, is launching with two anchor commitments – Canada at $US 147.4 million and the UK at $US 12.6 million. The GEF Assembly brought together 1,500 people from around the world, including environmental leaders and managers from government, business, academia, and civil society, including Indigenous, women, and young people.
Research
Trouble in the Amazon [Nature]
- Carbon flux research by Dr. Luciana Gatti, profiled in Nature, documents how the Amazon rainforest is becoming a net emitter. Deforestation, fires, expanding agriculture, and other human threats are driving the biome towards the limits of survival. Compelling overview, with the read.
Unlock the Endangered Species Act to address GHG emissions [Science]
- Despite the relationship between warming and sea ice loss, absence of a quantitative link between human-caused greenhouse gas (GHG) emissions, sea ice loss, and declining polar bear vital rates has foiled full Endangered Species Act (ESA) implementation for polar bears. By quantifying the relationship between anthropogenic GHG emissions and polar bear recruitment, researchers show ESA evaluations can, for the first time, include impacts on polar bears from greenhouse gas emissions.
A way to protect coastlines and restore marine ecosystems [University of Miami]
- Wahoo Bay, a new marine park in northern Broward County, offers University of Miami researchers the first test case of an innovative way to combine natural and human-made solutions to improve coastal resilience and restore marine, mangrove, and seagrass ecosystems.
Japan’s food tech sector is thriving [Forbes]
- Learn how technology in Japan is transforming food and ecological systems.
Climate Finance
Deals and commitments above $100mn
Individual Deals & Market Watch
Spain's Asterion buys German utility Steag for $2.8 bn [Reuters]
- Spanish infrastructure investor Asterion said on Friday it has agreed to acquire German utility Steag in a deal valuing the business at around 2.6 billion euros ($2.81 billion), committing to the power company's transition into a green energy producer. Asterion said it is supportive of German government plans to decommission coal plants and will invest to transform Steag into a green energy producer.
The LEGO Group pledges $1.4bn to achieve net-zero emissions by 2050 [Lego]
- The LEGO Group pledges to achieve net-zero greenhouse gas (GHG) emissions by 2050 as part of its continued efforts to reduce environmental impact. The company plans to triple its investment in environmental sustainability over the next three years, particularly in areas that will help reduce GHG emissions, spending more than $1.4 billion on sustainability-related activities.
Battery firm Redwood Materials raises over $1bn (series D) to expand US ops [Reuters]
- Redwood Materials said on Tuesday it had raised more than $1 billion in new funding as the battery materials firm, founded by former Tesla (TSLA.O) executive JB Straubel, seeks to expand its operations in the United States. The Series D funding round for Redwood, founded in 2017 by Straubel, was co-led by Goldman Sachs Asset Management, Capricorn's Technology Impact Fund and funds advised by T. Rowe Price Associates. Redwood Materials is a battery recycling startup that makes electric vehicles and sustainable materials for circular supply chains. The company more than quadrupled its financing since the turn of the year (totalling $3.8bn) and broke ground on an additional processing facility in South Carolina in Q1. In 2021, the company claimed to meet the cost of mining for raw materials, and hopes to bring the price down to half the cost required to mine them by 2030.
- Hozon New Energy Automobile raises 7 billion yuan (US$960 million) in pre- initial public offering (IPO) financing as the Chinese electric vehicle (EV) start-up gears up to tap the Southeast Asia market.
Mizuho issues green bond for EUR 750mn ($810mn) [Mizuho Group]
- The new medium-term business plan, starting from FY2023 puts forth Mizuho's long-term vision to increase financing for the transition to a low-carbon society. The bond, issued on 28 Aug 2023 at EUR 750mn with a 4.608% interest rate, will be used to finance environmentally-friendly projects, including renewable energy.
Chinese EV startup Xpeng shares soar 13% after announcing $744mn deal with Didi [CNBC]
- Chinese electric car company Xpeng said Monday it is buying Didi’s smart electric car development business in an exchange of shares worth $744 million. With the strategic partnership and new assets from Didi, Xpeng said it plans to develop an electric car for launch next year under a new mass market brand.
- Peregrine Energy Solutions LLC ("Peregrine"), an integrated multi-technology clean energy platform with a focus on utility-scale energy storage, announces it has signed an agreement with funds managed by AB CarVal to raise over $700 million of credit, equity, and debt to fund Peregrine's pipeline of over seven gigawatts of high-quality projects - including standalone battery, solar, and wind technologies.
Chinese EV maker AVATR raises over $411mn [Deal Street Asia]
- Chinese smart electric vehicles firm AVATR Technology, backed by state-run automaker Chongqing Changan Automobile and EV battery giant Contemporary Amperex Technology (CATL), says it has secured 3 billion yuan ($411.5 million) in a Series B financing round.
- Sunfire, an electrolysis company that designs and manufactures systems for the production of renewable industrial gas and fuel, is set to receive EUR 169mn from the European Commission. This grant will support the scaling of electrolyser technologies.
- Jordan invests 100mn dinars to build a factory for the manufacture of solar cells as production inputs for solar panels. The factory, slated to break ground by the end of 2023, will be built on an area of 130 dunams (130K sq ft), and is estimated to provide 520 job opportunities.
Tianneng New Materials completes the A-round financing of CNY 1bn ($137.7mn) [China Venture]
- Zhejiang Tianneng New Materials Co., Ltd.,the main body of lithium battery recycling under Tianneng Power, completes a round of Series A financing at 1 billion yuan. The investments will be used to boost the construction of Tianneng's new material production base, strengthen operation scaling, and optimize material processing.
- The U.S. Department of Energy (DOE) announces 106 awards totaling $126 million in research and development grants for 90 different small businesses whose projects will address multiple mission areas across the Department, including clean energy and decarbonization, cybersecurity and grid reliability, fusion energy, and nuclear nonproliferation.
- Redaptive, Inc., an Energy-as-a-Service (EaaS) provider, secures $125 million in financing from Deutsche Bank's US Private Credit & Infrastructure group to help accelerate metering, HVAC, solar, LED, and EV infrastructure. The warehouse facility will securitize Redaptive's portfolio of customer contracts.
- Canadian Solar Inc. (the "Company", or "Canadian Solar") (NASDAQ: CSIQ) announced today that Recurrent Energy, its wholly-owned subsidiary for global project development and power services, secures $112 million in project financing for its 160 MW (120 MWac) North Fork Solar project, located 100 miles southwest of Oklahoma City.
- Netherlands based Icos Capital announces first closing of its fourth consecutive pure play Climate Tech venture capital fund, Icos Capital Growth Fund IV (Icos IV). Commitments to Icos IV include strong support from cornerstone investors in prior Icos funds as well as several new corporate, financial, and public sector investors. The fund has a targeted size of €100 M with €150 M hard cap. Icos IV will support Climate Tech innovations to scale and promote decarbonization of large industries in sustainable food systems, industry digitization, carbon technology and sustainable chemicals & materials.
Nature-based Solutions
Deals and commitments above $1mn
Individual Deals & Market Watch
- With support from the Winn family of Dallas, including alumnus Steve Winn (B.S., ’69) and his wife Melinda, The University of Texas at Austin is embarking on a new commitment in biodiversity, natural-resources and field-station research.With more than $50 million in new philanthropy from the Winn Family Foundation and another $150 million in estimated institutional and additional philanthropic support, the University is increasing research investments in field stations and ecological research designed to take place over decades.
- CH4 Global, Inc., a climate tech company seeking to radically reduce GHG emissions in animal agriculture, announces US$29 million in Series B funding. The round was led by DCVC, DCVC Bio, and Cleveland Avenue – with participation from other investors with a strong interest in climate change – bringing the total raised to date to nearly US$47 million.
Denmark to donate $21.9mn to Brazil's Amazon Fund to fight deforestation [Reuters]
- Denmark will donate 150 million Danish crowns ($21.9 million) to the Brazilian government’s Amazon Fund to fight deforestation, Danish Minister for Development Cooperation and Global Climate Policy, Dan Jorgensen, announces with his Brazilian counterpart. The Amazon Fund was created in 2008 to raise donations to combat deforestation and promote preservation of the world's largest tropical rainforest, with Norway providing an initial $1 billion. Germany has contributed to the fund, and more recently Britain and the European Union, while the United States plans to contribute $500 million over five years.
UK government bodies announce plans for £15mn ($18.9mn) sustainable protein hub [Vegconomist]
- Two UK government funding bodies have recently announced intentions to establish a £15 million sustainable protein research hub, marking the largest single public investment the UK has made in plant-based and cultivated meat to date. The centre will focus especially on the commercialisation of high-quality innovations and the development of the next-gen sustainable proteins.
Veloz Bio, an alternative-protein company, raises $4mn in a seed round [SEC]
- Veloz Bio, a Mexico-based biotechnology company that uses molecular farming to create and manufacture animal-free and alternative proteins, files a claim with the SEC for $4mn raised in a seed round.
MadeRight raises $2mn for high-performance fungi-based packaging [Vegconomist]
- Israeli startup MadeRight raises $2 million in seed funding to further develop its fungi-based packaging solutions. The seed round was led by the incubator Fresh Start, with participation from Arkin Holdings and Arc Impact. It will be used to expand MadeRight’s development team, refine the production process, and enter new markets, with the goal of producing a commercially viable prototype by the end of 2024.
- Perfect Day agrees to sell The Urgent Company – the D2C brand it founded in 2020 – along with its consumer brands Coolhaus, Brave Robot (ice cream), Modern Kitchen (cream cheese), California Performance Co (protein powder) and Very Dairy (milk) for $1.25M, all of which feature Perfect Day’s animal-free whey protein made via precision fermentation.
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