Climate Investment Newsletter 11/27 - 12/3

Individual Deals and Market Watch

The record amount was up from £1.71 billion last year and £1.57 billion in 2019, according to figures from the data provider Dealroom and the UK’s Digital Economy Council.

BlackRock has achieved a US$673 million final fundraise for the Climate Finance Partnership (CFP), a flagship public-private finance vehicle focused on investing in climate infrastructure across emerging markets in order to help accelerate the global transition to a net zero economy. A global consortium of 22 investors including governments, philanthropies, and institutional investors committed to the fundraise, which was oversubscribed and exceeded its target of US$500 million.

Canadian Solar Inc has closed its previously announced "at-the-market" offering programme of common shares, raising USD 150 million (EUR 133m) in gross proceeds in the process.

General Fusion announced it is closing an oversubscribed $130 million (USD) Series E funding round filled by a new syndicate of global investors. This financing, led by Temasek, significantly expands the company’s portfolio of institutional, sovereign, family office, and high net worth investors, providing the prelude to a large financing round being prepared for 2022. Combined with broad financial support from the Canadian, U.K., and U.S. governments, the General Fusion Series E round supports aggressive pursuit of several near-term initiatives and milestones in its program to commercialize Magnetized Target Fusion (MTF).

Investment funds are piling into the European carbon market for the year-end squeeze. This has contributed to European emissions allowances (EUAs) breaking the psychological price threshold of 70 euros per metric ton ($79/ton) and reaching 75 euros/ton on Nov. 25, 2021.

In 2020 alone, more than 500 new ESG funds were launched, according to Morningstar. At the same time, assets sitting in ESG products swelled to €1tn as the Covid pandemic fuelled investor interest in funds designed to do good by society and the environment.
Growing doubts that the products can live up to the hype are a “wake-up call” that may unleash a “panic”, one consultant said. As US and German watchdogs probe German asset manager DWS following accusations made by a former employee about its ESG credentials, nervous rivals have toned down their marketing over fears they could be next to be targeted.

Macro Commitments

Delivering a long-term strategy it dubbed Nissan Ambition 2030, the Japanese carmaker stopped short of predicting an end to its production of internal combustion engine vehicles — an announcement that some analysts had speculated could be imminent.

The British government's development finance institution CDC is looking to pump in up to $3 billion in India over the next five years, its global chief executive Nick O'Donohoe told ET.

The government-backed U.K. Infrastructure Bank will invest as much as 250 million pounds ($331 million) in a private fund that’s seeking to double the amount of subsidy-free solar power in Britain.

China Petroleum & Chemical Corporation, better known as Sinopec, announced the start of construction of a CNY-3-billion (USD 471m/EUR 414m) green hydrogen production complex in the Xinjiang Uyghur Autonomous Region.

Pathways, Frameworks, Case Studies, Research, Climate Science

Lazard Ltd (NYSE: LAZ) announced the formation of the Lazard Climate Center to provide rigorous, data-driven insights on the financial effects of climate change and the energy transition on companies and markets. The initiative seeks to fill a crucial gap in climate research, which until now has tended to focus on national or sector-level trends as opposed to the impact on specific companies. Formally launching at the first Lazard Climate Conference, the Climate Center will release its inaugural findings on the relationship between greenhouse gas emissions and corporate valuations of public companies globally.

New renewable power capacity is forecast to reach 290 gigawatts this year, surpassing last year’s record of 280GW, said the IEA in its annual review of renewable energy. This compares with current fossil fuel and nuclear power capacity of 4,800GW.

The world’s steel industry could eliminate its greenhouse gas emissions by 2050 through ramping up recycling, using hydrogen for fuel and capturing carbon from older plants, according to a BloombergNEF study. But getting there won’t be easy.

Indonesia will need to secure $148 billion in additional funding to meet its goal of reducing carbon emissions through 2030. Southeast Asia’s largest economy needs $365 billion in overall green investments to cut emissions by 29% from the business-as-usual scenario, Febrio Kacaribu, the head of fiscal policy agency, said in a Monday briefing. Of that, $97 billion should come from the government, while $120 billion would be from planned private investments.

"By signing up to this important initiative, ADB is demonstrating its commitment to manage climate-related risks and embrace the opportunities presented by the low-carbon transition," said ADB Managing Director General Woochong Um.

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