Climate Investment Newsletter 5/1 - 5/7

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Individual Deals and Market Watch

EnCap closes USD-1.2bn fund to invest in solar, wind and storage [Renewables Now]

• US growth capital provider EnCap Investments LP has successfully closed its first energy transition fund at USD 1.2 billion (EUR 1bn), with plans to invest in wind, solar and energy storage enterprises.

Battery maker ESS to surpass USD-1bn EV in merger with blank check co [Renewables Now]

• US long-duration iron flow batteries maker ESS Tech Inc has agreed to merge with a publicly-traded special purpose acquisition company (SPAC) to gain a listing in New York and establish a combined company with a USD-1.07-billion (EUR 883.5m) pro forma enterprise value (EV).

NAB trims rate for $515 million ‘sustainable’ Port of Newcastle [Financial Review]

• The $515 million facility will get the reduced interest rate if Port of Newcastle meets several commitments, such as reducing Scope 1 and Scope 2 greenhouse gas emissions below the 2025 trajectory based on the company’s “Well below 2-degree scenario”.

CarVal Investors lines up $490 million for Clean-Energy Fund [Bloomberg Green]

• The fund, which is focused on credit and investment in infrastructure like solar farms and battery storage mainly in North America, exceeded its initial target size of $250 million, according to a statement.

Aviva Investors launches climate transition credit fund for AA-rated PM with initial capital allocation of $350m [City Wire]

• The new Aviva Investors Climate Transition Global Credit fund is available to European investors and has an initial $350m capital allocation from Aviva Investors UK multi-asset range and multi-asset portfolio.

Modern Meadow closes $130 million series C funding, names Anna Bakst CEO [BOF]

• The new leadership and cash infusion are intended to help bring the company’s “biofabrication” technology, which can replace fossil fuel-based textile coatings and enhance the performance of natural materials, to commercial scale for the first time.
• Modern Meadow is an American biotechnology company that is primarily known for its lab-grown leather.

BMW, Ford bet $130M on Solid Power's advanced batteries for electric vehicles [Canary Media]

• The Colorado-based company makes a fully solid-state electrolyte and packages it into cells that promise improvement in safety and energy density compared to today's lithium-ion cells. These features are alluring to electric vehicle makers.
• Note from C4C: Solid state battery competitor QuantumScape added Volkswagen as an investor and VW recently committed another $100 million in March. However, QuantumScape acknowledged to Bloomberg that it uses some liquid materials in their batteries (Canary Media). This makes Solid Power’s claim to be the only all-solid-state battery to be even more intriguing.

Lombard Odier IM rolls out four TargetNetZero funds [Investment Week]

• The TargetNetZero Global Equity and TargetNetZero European Equities strategies are low-tracking error strategies that tilt the MSCI World and MSCI Europe indices towards companies in climate-relevant sectors that are aligned to the Paris Agreement through rapid decarbonisation.

HSBC launches Green Deposits for corporate and institutional clients in the UAE [Zawya]

• HSBC May 4th launched Green Deposits in the UAE, which will give corporate and institutional clients a mechanism to make USD and AED deposits in the UAE knowing their funds will be used to finance green initiatives.
• HSBC is first bank in the UAE to offer a green deposit account

Macro Commitments

South Korea unveils plan for 6-GW $32.1bn floating wind power complex [Renewables Now]

• South Korea announced on Thursday, May 6th, plans to invest KRW 36 trillion (USD 32.1bn/EUR 26.6bn) in the construction of the world’s largest offshore wind park on floating foundations.
• The overall investment will come from both the public and private sectors and is expected to create about 210,000 jobs. Furthermore, the project is set to be located off the coast of Ulsan City because of its wide continental shelf with a depth of 100-200 metres. [Reglobal]

German government to shift €9bn pension money into EU climate benchmarks as part of new national strategy [Responsible Investor]

• Germany has published its sustainable finance strategy, warning that “sustainability risks are also investor risks” and taking up many of the recommendations put forward by market participants earlier this year.
• The 42-page plan (in German) sets out five goals and 26 “concrete measures” that the Government hopes will “develop Germany into a leading sustainable finance centre”.

$5bn US loan scheme to unlock 60GW wind and solar [ReCharge]

• Department of Energy cites 22 'shovel-ready' projects that represent a $33.3bn investment that could create as many as 600,000 new jobs

Amp Energy plans USD-1.55bn renewables hub in S Australia [Renewables Now]

• Amp Energy announced May 4th it will invest more than AUD 2 billion (USD 1.55bn/EUR 1.29bn) to establish a renewable energy hub in South Australia that includes over a gigawatt of solar power generation, some wind and energy storage.
• Founded in 2009, Amp has become a leading global energy transition platform having successfully developed over 1.8 gigawatts of renewable generation assets

Pathways, Frameworks, Case Studies, Research

Groundbreaking Climate Transition Pathways (CTP) accreditation established to help business move to low-carbon economy [Intrado]

• Willis Towers Watson, a leading global advisory, broking, and solutions company, May 4th announced the launch of Climate Transition Pathways (CTP), an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identifying which organizations have robust transition plans aligned to the Paris Agreement, and supports their role as stewards in the transition to a low-carbon economy.

UN launches intelligence tool for natural capital accounting [The Statesman]

• An innovative artificial intelligence (AI) tool that will make it easier for countries to measure the contributions of nature to their economic prosperity and well-being was launched by the United Nations and the Basque Centre for Climate Change (BC3).

Report: Blue carbon strategy will be key to reach net zero by 2050 [Climate Action]

• The Marine Conservation Society has launched a new report in partnership with Rewilding Britain which outlines the importance of our seas in helping the UK to reach net zero by 2050.
• The report states that globally, rewilding key blue carbon stores such as seagrass beds, saltmarshes and mangroves could deliver carbon dioxide mitigation amounting to 1.83 billion tonnes. That’s 5% of the emissions savings we need to make globally.

Global electric car sales set for further strong growth after 40% rise in 2020 [Climate Action]

• The IEA’s Global Electric Vehicle Outlook 2021 finds that despite the pandemic setting off a cascade of economic recessions, a record 3 million new electric cars were registered in 2020, a 41% increase from the previous year. By comparison, the global automobile market contracted 16% in 2020. Electric cars’ strong momentum has continued into this year, with sales in the first quarter of 2021 reaching nearly two and half times their level in the same period a year earlier.

“Massive Growth” of alt protein field in Israel as total investment increases 8X since 2018 [Vegconomist]

• According to a new GFI Israel study, the total investment in companies developing alt proteins in Israel has increased eightfold across the plant-based, cell-cultured and fermentation fields. The total of all investments in 2020 was almost three times higher than the previous year, with 154% annual growth (YOY).

Emissions cuts could drop the impact of melting ice on oceans by half [NYT]

• A new study published in Nature said that limiting warming to 1.5 degrees Celsius could reduce sea level rise from melting ice sheets from about 10 inches to about five by 2100.

Malaysia Publishes Climate Change Taxonomy For Financial Institutions [Lexology]