Climate Investment Newsletter 12/1 - 12/15
COP15 in Review
COP15’s message to the world: Invest $250 billion in nature or risk the consequences [Fortune]
EU agrees law preventing import of goods linked to deforestation [Reuters]
- The European Union agreed on Tuesday on a new law to prevent companies from selling into the EU market coffee, beef, soy and other commodities linked to deforestation around the world. The law will require companies to produce a due diligence statement showing their supply chains are not contributing to the destruction of forests before they sell goods into the EU - or they could face hefty fines.
- Investing in policies that support Nature-based Solutions (NbS) would generate significant employment opportunities, particularly in rural areas, says a new report by the International Labour Organization (ILO), the UN Environment Programme (UNEP) and the International Union for Conservation of Nature (IUCN).
- Nature tech encompasses any technology that can be applied to enable, accelerate, and scale-up nature-based solutions – which require significant new levels of investment if we are to reach our climate, biodiversity and land degradation goals.
Individual Deals and Market Watch
- 150 financial institutions representing over $24 trillion in assets under management have called on countries to adopt a post-2020 Global Biodiversity Framework at the UN Biodiversity Conference (COP15).
Climate tech investment is expected to reach $79B in 2022 [Market Screener]
- Climate tech is on track to receive an all-time high amount of investment in 2022 thanks to investments totaling $59 billion as of Q3 2022.
Over USD 58bn committed to long-duration storage since 2019, says WoodMac [Renewables Now]
- Governments and companies have committed more than USD 58 billion (EUR 55bn) to long-duration storage energy (LDES) projects globally over the past three years as they can help enable a grid with more renewables, Wood Mackenzie said last week.
EIP raises EUR 1bn for energy transition infrastructure fund [Renewables Now]
- Energy Infrastructure Partners (EIP) said today its global energy transition infrastructure fund held a first close at EUR 1 billion (USD 1.05bn) with the majority of the commitments coming from Swiss pension funds.
Speedinvest raises €500m for next wave of European tech start-ups [Sillicon Republic]
- Around €300m will be invested into tech start-ups that are at pre-seed and seed-stage through its fourth flagship fund, called Speedinvest 4.
Autonomous and electric truck company Einride raises $500M in equity and debt [Tech Crunch]
- The cash injection constitutes an equity-based $200 million Series C portion from backers including Northzone, EQT Ventures, Temasek, Swedish pension fund AMF, Polar Structure and Norrsken VC. Additionally, the Swedish company said that it has secured $300 million in debt funding led by Barclays Europe, which will be used substantively to bolster its fleet of vehicles as it extends further into new and existing markets across Europe and North America.
NextEnergy UK solar fund raises £487m [Environmental Finance]
- The 10-year closed-ended private fund invests in unsubsidised, new-build solar projects in the UK. It has already bought its first three utility-scale solar assets, of which two are operational, for commitments of £145 million.
New Forests launches A$600m ($404mln) ANZ landscapes and forestry fund [Global AgInvesting]
- New Forests, a global investment manager of nature-based real asset and natural capital strategies, announced the launch of its new Australia New Zealand Landscapes and Forestry fund (ANZLAFF) with the goal of raising A$600 million (US$404.73 million) over the next two-to-three years.
Bids top USD 400m in Day 1 of California offshore wind auction [Renewables Now]
- The first day of bidding in the auction for offshore wind lease areas in waters off California’s coast attracted proposals with a combined value of over USD 400 million (EUR 382.8m).
- Partnerships for Climate-Smart Commodities is working to expand markets for American producers who produce climate-smart commodities, leverage greenhouse gas benefits of climate-smart production, and provide meaningful benefits to producers, including small and underserved producers.
Rwanda secures $319 million under IMF’s new climate funding program [Bloomberg]
Group14 closes an additional $214M to complete $614M Series C funding round [Cision]
- According to Pitchbook, Group14's Series C round represents one of the top 10 largest financings in the climate tech sector completed in 2022. The growing importance of market-ready, transformational battery technology to power the electrification of everything has given rise to a wave of interest from strategic, financial and impact investors in commercial manufacturers of silicon battery technology like Group14.
AIIB signs $200 mln facility with TSKB for climate mitigation efforts [Reuters]
- The China-backed Asian Infrastructure Investment Bank (AIIB) said it signed a $200 million on-lending facility with Industrial Development Bank of Turkey (TSKB.IS) for Turkey to reach climate mitigation and adaptation goals under the Paris Agreement.
$200 million in drought, climate, nature-based grants offered by CDFW [Corning Observer]
- The California Department of Fish and Wildlife (CDFW) has announced the availability of over $200 million in new funding for multi-benefit ecosystem restoration and protection projects under Drought, Climate and Nature-Based Solutions initiatives.
Mirova to manage $148m nature fund [Environmental Finance]
- The fund was initiated by luxury goods corporation Kering and supported by the L’OCCITANE Group, a major cosmetics group. The investors are targeting a fund size of €300 million.
Kering, L’Occitane Group back new Climate Fund for Nature with €140 mln [Carbon Pulse]
NOAA, NFWF announce record $136 million for coastal resilience [NOAA]
- NOAA and the National Fish and Wildlife Foundation (NFWF) today announced a record investment in projects that will help communities prepare for increasing coastal flooding and more intense storms, while improving thousands of acres of coastal habitats. The funding, in collaboration with the Department of Defense (DOD) and private sector partners, provides more than $136 million to support 88 natural infrastructure projects in 29 states and U.S. territories.
Verdane impact fund invests €110m in 'circular' furniture company [Environmental Finance]
- The €4 billion growth equity investor led a financing round of €110 million ($115 million) in Nornorm, which provides furniture through a subscription model and “has significant impact potential to disrupt the inefficient existing B2B furniture value chain”.
- Since its founding in 2013, the company has raised a total of $155 million to develop nature-based solutions for sustainable food production, replacing up to 30% of climate damaging synthetic fertilizer and breeding tastier, healthier and more sustainable crops.
COP15: JGP-WWF blended agroforest fund to target R$220 million ($41 million) [Environmental Finance]
- A forest restoration fund with a target of raising R$220 million ($41 million) by the end of its first year will be co-managed by JGP Asset Management and World Wildlife Fund (WWF), it was announced at COP15.
Macro Commitments
Barclays ramps up sustainable finance goal to US$1trn [IFR]
- Barclays said it plans to provide US$1trn of funding by the end of 2030 for sustainable finance or firms transitioning to lower carbon use and will ramp up its debt and equity capital markets teams to help meet the goal.
EU agrees €20 bln boost for energy funding to quit Russian gas [Reuters]
- The European Union will raise an extra 20 billion euros from its carbon market for investments to help end more swiftly the bloc's reliance on Russian fossil fuels, under a political deal reached.
G7 makes new $15 billion offer to Vietnam to cut coal use [Reuters]
Air Products, AES to build USD-4bn green hydrogen plant in Texas [Renewables Now]
- US industrial gases company Air Products (NYSE:APD) and US power company The AES Corp (NYSE:AES) will invest USD 4 billion (EUR 3.8bn) to build a green hydrogen plant in Wilbarger County, Texas that will be the largest in the US, the companies said.
U.S. Energy Department to spend $3.7 billion on carbon removal [Reuters]
- The U.S. Department of Energy agreed to commit $3.7 billion to finance projects to remove planet-warming carbon from the atmosphere and meet the nation's goal of net-zero greenhouse gas emissions by 2050.
- Spanish electric utility Iberdrola SA (BME:IBE) said that it had wrapped up construction works on two solar farms totalling 46 MW in Portugal, and upheld its commitment to invest EUR 3 billion (USD 3.16bn) in renewables in the country in the coming years.
IMC to raise 2.5bn via green bonds for solar power plant [Construction World]
- An official revealed that the Indore Municipal Corporation (IMC) aims to list green bonds as a public issue in a first in order to earn 2.5 billion for the construction of a 60 megawatt (MW) solar power plant.
Colombia's Ecopetrol to invest at least USD 1.2bn in energy transition in 2023 [Renewables Now]
- Colombian oil-and-gas major Ecopetrol SA (NYSE:EC) said it would spend between COP 5.9 trillion (USD 1.23bn/EUR 1.16bn) and COP 6.8 trillion in energy transition initiatives, such as renewables and hydrogen, as part of the investment plan for 2023.
- Desjardins Group is pleased to announce a partnership with Export Development Canada (EDC) that will enable the organization to launch a new sustainable financing offer for medium and large export companies. With this new product, Desjardins will grant up to $1 billion over the next three years for projects that aim to reduce greenhouse gas emissions.
Hess to buy $750 million in carbon credits from Guyana [VOA]
- U.S.-owned Hess Corporation, a consortium partner in Guyana’s offshore oil sector, has agreed to buy $750 million worth of carbon credits from the South American nation in the next decade as it works to ensure Guyana’s almost intact Amazonian rainforests remain standing for decades to come, officials said.
Government announces £500m school energy efficiency programme [Business Green]
Indonesia's sovereign wealth fund targets $500m in 'green' investments [Environmental Finance]
- The Indonesia Investment Authority (INA) has signed an agreement with Danish impact investor, the Investment Fund for Developing Countries (IFU), to look for co-investment opportunities in the ‘green transition’.
Egypt to issue sustainability bonds worth $500M within 6 months [Egypt Today]
- Egypt seeks to offer sustainability bonds for the first time, at a value of $500 million, in the first half of 2023, Finance Minister Mohamed Maait said.
Tanzania to gain from $350 million in climate change funding [The Citizen]
- Dar es Salaam. Tanzania, along with four other countries, are set to benefit from a global $350 million fund disbursed through the Climate Investment Funds (CIF) to finance nature-based solutions to climate change threats.
EBRD and PGGM to mobilise €250m of sustainable development finance [EBRD]
- The European Bank for Reconstruction and Development (EBRD) and pension investor PGGM Vermogensbeheer B.V. (PGGM Investment Management) are joining forces to mobilise €250 million of European pension-fund capital. Under the new partnership, PGGM will provide capital for investments that support the transition to more sustainable, low-carbon economies across the EBRD regions.
Union Square Ventures doubles down on Climate with $200 million fund [The Information]
- Union Square Ventures, the venture capital firm known for its early stakes in Twitter, Coinbase and Etsy, has raised $200 million for its second fund focused on early investments in climate tech startups, managing partner Albert Wenger confirmed to The Information. The fund amounts to a doubling down on the sector for the New York firm, a sign of the rising interest among venture capitalists and their backers in technology to combat global warming.
Pathways, Frameworks, Case Studies, Research, Climate Science
- The European Insurance and Occupational Pensions Authority (EIOPA) analysis found the 187 pension funds across 18 countries, with a combined €2 trillion in assets, have “material exposure to transition risks”. The scenario modelled a disorderly transition because of delayed implementation of policy measures, which resulted in a sharp rise in carbon prices.
- Throughout 2022, RFSI News has explored the role that different types of capital – including debt, private equity, and venture capital – can play in enabling regenerative food systems. Another source of capital – philanthropic capital – plays a unique and growing role in funding the regeneration of food systems with to its ability to de-risk investments in what is still a relatively nascent space.
'First-of-its kind' study values nature markets at $10trn annually [Environmental Finance]
- Agriculture and livestock represent $4.3 trillion annually, while mining, minerals and oil & gas are valued at $4.6 trillion, NatureFinance said in a report published with McKinsey, Global Nature Markets Landscaping Study.
European cultivated meat market to reach $818M, but will lag behind US & Asia [Vegconomist]
- Following the recent FDA approval of Upside Foods’ cultivated chicken in the US, a report by GovGrant has analysed how the European and British cultivated meat markets are faring in comparison.
US$7 trillion a year needed to hit net-zero goal, says BNEF [The Edge Markets]
- In a statement on Wednesday (Dec 7), research company BloombergNEF (BNEF) said electric vehicles and low-carbon power will be the biggest markets for investors, followed by power grids.
Climate change could force 1.2 billion to move by 2050. Is the world even remotely ready? [Mongabay]
- In a world beset by rising temperatures, devastating storms, and flash floods, climate migration and disaster displacement are quickly becoming the signal 21st century crisis. The vast majority of those worst affected are in the world’s poorest and fastest warming countries.
- This means extra wind, solar and other renewable technologies equivalent to the entire electricity system of India being built by 2026, on top of last year’s projections.
The Nature Tech Market. Necessary, Emergent, Dynamic
Capital for Climate, along with its partner, Nature4Climate, released a new report, "The Nature Tech Market: Necessary, Emergent, Dynamic”.
A first-of-its-kind landscape analysis of the nature tech market, this report illuminates a burgeoning sector that will help protect, manage, and restore nature.
Click below for the report and for our NbS Investment Platform!
Report: The Nature Tech Market. Necessary, Emergent, Dynamic
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