Climate Investment Newsletter 12/4 - 12/10

Individual Deals and Market Watch

Fannie Mae green MBS issuance reaches $100 billion [Cision]

• Fannie Mae (OTCQB: FNMA) announced it has completed the issuance of $100 billion of green multifamily mortgage-backed securities (MBS), helping transform housing finance and creating a more sustainable future for U.S. communities. This milestone illustrates how Fannie Mae's scale and capacity can foster liquidity to support the greening of U.S. housing stock.

GM EV battery partner LG Energy seeks up to $10.8 billion in record IPO [Bloomberg Quint]

• LG Energy Solution plans to raise as much as 12.75 trillion won ($10.8 billion) in what would be South Korea’s biggest-ever initial public offering, defying concerns over fires involving its batteries that led to a mass recall of Chevrolet Bolt electric vehicles.

H2 Green Steel and Iberdrola launch €2.3 billion green hydrogen venture [Smart Energy Decisions]

• The Swedish green impact company H2 Green Steel (H2GS) and Iberdrola, a renewable energy company with headquarters in Spain, announced a partnership to build a 1-gigawatt plant to produce green hydrogen. The new plant will produce and feed green hydrogen to a 2 million ton direct reduction tower, enabling Green Steel production with a reduction of CO2 emissions by 95%.

California CCAs issue $2 billion municipal clean energy bonds [Smart Energy Decisions]

• Three Community Choice Aggregators (CCAs)  issued California's first ever municipal non-recourse Clean Energy Project Revenue Bonds through the California Community Choice Financing Authority (CCCFA). The two Clean Energy Project Revenue Bonds prepay for the purchase of over 450 MW of clean electricity, which is enough to power 163,000 homes and reduce 765,000 metric tons of GHG emissions annually. These transactions will reduce renewable power costs by almost $7 million annually for the first 5-10 years.

Insurers eye $1.3 billion opportunity in voluntary carbon market [Carbon Pulse]

Trafigura joins Australian hydrogen rush with A$750 mln ($540 mln) project [Carbon Pulse]

First Solar to get USD-500m DFC loan for 3.3-GW module factory in India [Renewables Now]

• The US International Development Finance Corporation (DFC) will provide up to USD 500 million (EUR 442.8m) in debt to First Solar Inc (NASDAQ:FSLR) to back its plan for a 3.3-GW DC thin-film solar module factory in India.

Bezos gives $443 million to climate groups in Earth Fund push [Bloomberg Green]

• The most recent contributions are in addition to the $791 million he gave to 16 organizations last year as part of his $10 billion commitment to his Earth Fund to fight climate change. Bezos has promised to distribute the full amount by 2030.

Canadian pension investor ploughs USD 300m into Octopus [Renewables Now]

• Canada Pension Plan Investment Board (CPP Investments) will make an initial equity investment of USD 300 million (EUR 265m) in UK’s Octopus Energy Group as part of a long-term strategic partnership between the entities announced today.

Virginia reaps $228 million in first year of carbon market participation [Virginia Mercury]

• Virginia took in $227.6 million for flood protection and low-income energy efficiency programs during its first year of participation in the Regional Greenhouse Gas Initiative, a carbon cap-and-invest market involving 10 other Mid-Atlantic and New England states.

Harsha Moily's $200 million climate tech startup fund eyes first close in Q1 2022 [Money Control]

• Nature Fix Climate (NFC) Ventures, a climate technology-focused fund launched by Harsha Moily (son of senior Congress leader M Veerappa Moily) and Balaji Srinivas, former Abraaj Group managing director, aims to hit the first close of its $200 million fund by the first quarter of 2022.
• The fund, which was first announced in July this year, has received in-principle commitment of upto $85 million from five anchor investors, Moily told Moneycontrol.

The Every Company raises $175m to crack open the precision fermentation egg market [Green Queen]

• In an oversubscribed Series C funding round, Bay Area platform The Every Company has raised an additional $175 million for its precision fermentation egg protein, bringing its total funding to more than $230 million.

EU carbon price may hit 100 euros this year, buoyed by gas price surge [Reuters]

Macro Commitments

Masdar, Engie ink USD 5bn deal for 2 GW of renewables, green hydrogen [Renewables Now]

• Abu Dhabi’s renewable energy company Masdar and French utility Engie SA (EPA:ENGI) have inked a deal to invest USD 5 billion (EUR 4.43bn) in the development of renewable energy and green hydrogen projects of over 2 GW by the end of the decade in a push to enhance the energy transition in the United Arab Emirates.

Ford to retire $5 billion in high-interest debt, issue green bonds [Financial Post]

• Ford Motor Co said it plans to retire up to $5 billion in high-interest debt and tap into the fast-growing market for “green” bonds to help it finance new electric vehicles and expand credit to customers with lower scores.
• Ultimately, the automaker aims to regain an investment grade rating for itself and Ford Credit, its captive financing arm, which in turn would lower the cost of future borrowing.

NYS Pension Fund commits $2 billion to climate transition index [OSC State NY]

• The New York State Common Retirement Fund (Fund) will invest $2 billion in an index focused on reducing the risks of climate change and capitalizing on the opportunities arising from the transition to a low-carbon economy, State Comptroller Thomas P. DiNapoli, trustee of the fund, announced. This is part of the Comptroller's Climate Action Plan announced in 2019 and his goal for the Fund of net-zero greenhouse gas emissions by 2040.

EC approves Croatia's 783 mln euro scheme to aid power output from RES [Renewables Now]

• The European Commission (EC) said on Thursday it has approved Croatia's 783 million euro ($886 million) scheme to support production of electricity from renewable energy sources (RES).

New Jersey to allocate USD 350m in offshore wind tax credit scheme [Renewables Now]

• Regulators in New Jersey are awaiting bids for projects looking to qualify in its tax credit programme that will support offshore wind development with up to USD 350 million (EUR 310.1m).

Indian e-scooter startup to invest up to $330m in new factories [Arab News]

• The Bengaluru-based startup is building a facility located an hour away from Hosur, which is expected to become operational in 2022 with a production capacity of 1 million electric scooters per year, Bloomberg reported.

Government of Canada announces $200M to address climate change by restoring carbon-rich ecosystems through nature-based solutions [Cision]

• Building on Canada's commitment to protect and conserve nature, the Minister of Environment and Climate Change, the Honourable Steven Guilbeault, announced that applications are now being accepted for the Nature Smart Climate Solutions Fund. With up to $200 million available over the next five years, the funding will help individuals and organizations reduce Canada's greenhouse gas emissions by conserving, restoring, and enhancing the management of critical ecosystems. Supported projects will focus on restoring degraded ecosystems and conserving carbon-rich areas at high risk of conversion. Proposed projects would also focus on improving land management practices, especially in the agriculture, forest, and urban development sectors. Funding applications for projects to be completed in 2022–2023 will be accepted until January 25, 2022.

Pathways, Frameworks, Case Studies, Research, Climate Science

Plant-based skincare products market to surpass $683m in 2021 [Vegconomist]

• According to a new report, the plant-based skincare products market is projected to surpass a valuation of $683 million in 2021, with the European market projected to reach $339 and the North American market estimated at $319.2 million. China is stated as a rising player in the category.

American packaged goods to skyrocket past $1.3 trillion following plant-based demand [Vegconomist]

• The study predicts the US market for packaged foods will reach $1.376 trillion by 2028 and states that the ” growing trend of plant-based and organic foods is driving the market. With the rising health consciousness, consumers are gradually shifting toward healthy food and drink alternatives”.

Nearly a third of Singapore’s financial assets exposed to climate risk, says central bank [Responsible Investor]

• The Monetary Authority of Singapore (MAS) has estimated that 30% of financial assets in the island-state could face shifts in valuations or higher costs of doing business as the world transitions to a low-carbon economy.  
• The figure primarily refers to climate ‘transition risk’, one of the two channels through which climate change risk is transmitted to the financial system. The other channel, known as ‘physical risk’ or the physical impacts of climate change on the economy, was not considered by MAS due to “data limitations as well as the complexity and uncertainty associated with extreme weather events”.

Green Finance Initiative launches new UK initiative to help mobilise private investment in nature [Private Equity Wire]

• The Green Finance Institute has launched a new online knowledge resource, GFI Hive, designed to share the latest information and insights on how to increase private investment in nature restoration and nature-positive outcomes in and for the UK.

Climate Transition Pathways (CTP) accreditation framework incubated by Willis Towers Watson continues to build cross-industry endorsement with Arch and Fidelis declaring their support [Yahoo]

• Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking, and solutions company, today announced their delight that Arch Insurance International have committed to align capacity, and Fidelis Insurance have endorsed Climate Transition Pathways (CTP), an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identifying businesses with robust low-carbon transition plans. This follows on from the recent announcement that Liberty Specialty Markets and SCOR had become the first group of insurers to support CTP.

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