Climate Investment Newsletter 2/5 - 2/11

Individual Deals and Market Watch

Swiss renewable power producer and energy trader Axpo Holding AG has signed an unsecured revolving credit facility (RCF) totalling EUR 2.5 billion (USD 2.86bn) with a global syndicate of 22 banks, it said.

The issue generated massive interest from investors, especially those dedicated to sustainability projects. As a result, the offer was oversubscribed by almost 3 times reaching more than €1.5 billion, reflecting investors’ confidence in the group’s business model and prudent financial strategy. The bonds have a maturity of 8 years and a fixed annual coupon of 2%.

A British energy storage developer has secured a bumper debt package that will help accelerate its work on electric vehicles. Zenobe Energy Ltd. has signed a financing platform worth as much as 241 million pounds ($326 million) to help service and fund as many as 430 new electric buses in the U.K. and Ireland, the London-based company said. It designs, builds and operates battery systems for power and transport, and aims to electrify or help run 3,000 buses by 2025.

The fund represents the firm’s first private equity impact fund and has closed with a total of $218 million from a spectrum of global investors. The fund will aim to generate strong returns while also addressing climate change and inequality.

Sustainable private equity firm Lightsmith Group announced the final close of Lightsmith Climate Resilience Partners SCSp RAIF– the first private equity fund of its kind focused on climate resilience and adaptation – with $186 million in capital.

The price of permits in the European Union's carbon market closed at a record high above 96 euros last week, with analysts expecting the symbolic 100 euro level could soon be breached.

Macro Commitments

Energy storage company H2 Industries will invest USD 3 billion (EUR 2.62bn) to build a plant in Egypt that will produce 300,000 tonnes of green hydrogen per year, executive chairman Michael Stusch told newspaper Asharq.

French Prime Minister Jean Castex announced support from the French Government for ArcelorMittal’s decarbonization program in France, which involves a €1.7 billion investment in its Fos-sur-Mer and Dunkirk sites in France. This investment will enable a profound transformation of steelmaking in the country and a total reduction of close to 40% or 7.8 million tonnes per year in ArcelorMittal’s CO2 emissions in France by 2030. This transformation will represent a 10% reduction in greenhouse gas emissions from the manufacturing industry in France and put the country’s steelmaking industry on a path aligned with the Paris Agreement targets.

The USDA will invest $1 billion in pilot projects that promote farming, ranching and forestry practices that cut greenhouse gas emissions or capture and store climate-warming carbon, USDA Secretary Tom Vilsack told Reuters.

McPhy Energy SA (EPA:MCPHY) will receive up to EUR 114 million (USD 130m) in financial support for the construction of its electrolyser Gigafactory in Belfort, French President Emmanuel Macron confirmed.

Pathways, Frameworks, Case Studies, Research, Climate Science

The South Korean alt-meat market is expanding rapidly, according to data from Euromonitor and the Korea Agro Fisheries and Food Trade Corporation.
The market grew by 35% year-on-year between 2020 and 2021, and was worth $13.9 million by last year. This growth is expected to continue as more Koreans embrace plant-based eating, largely for environmental and health reasons.

Morningstar has removed more than 1,200 funds with a combined $1.4tn in assets from its European sustainable investment list after an “extensive review” of their legal documents.
The cull underscores the challenge in ensuring sustainable investment products meet customers’ expectations and make a positive impact on the environment while regulators try to formalise definitions and best practice.

What’s new in climate investment?