Your Newsletter at a Glance
Note from the author: This week sees a large release of funds from several US Government acts targeted toward conservation and ecosystem restoration across the nation. California tribes will also benefit from a state program specifically developed to fund Indigenous-led nature based solutions in conservation, management, and stewardship.
Blackstone leads this week in the climate investment space with large funds going toward the Blackstone Green Private Credit Fund III (BGREEN III).
A few other tasty items you can find in this issue:
- Look out for cell-based pork coming to market in 2024.
- Africa sees large commitments in climate and nature-based solution funding.
- US DoE highlights supply chain risk for critical materials in clean energy tech.
- Curated tree diversity means more ecosystem function and economic empowerment.
- Only 4.3% of climate finance goes towards global agriculture.
Deal Count: This issue covers $410.7bn in deals and commitments to climate finance around the world, with ~$4.6bn in funds moving towards Africa and LATAM. Nature-based solutions saw ~$1.5bn in deal flow centered around US/Canada ($0.5bn), Europe ($0.4bn), and Africa ($0.5bn). Read more details in the 37 deal and research highlights below.
Climate Finance
Deals and commitments above $100mn
Market Watch
Blackstone closes record energy transition private credit fund at over $7bn [Blackstone]
- Blackstone (NYSE: BX) announced the final close of its energy transition credit fund, Blackstone Green Private Credit Fund III (BGREEN III). BGREEN III closed at its hard cap of $7.1 billion, representing the largest energy transition private credit fund ever raised. BGREEN III is managed by Blackstone Credit’s Sustainable Resources Platform, which focuses on providing private credit to the renewable energy, infrastructure, and energy transition marketplace. The Platform has approximately 40 investment professionals across North America, Europe, and Asia and invests across the credit spectrum in investment grade credit, non-investment grade credit, preferred and convertible securities.
New Zealand, BlackRock to launch $1.22bn climate infrastructure fund [Reuters]
- New Zealand's government and U.S.-based BlackRock Inc will launch a NZ$2 billion ($1.22 billion) climate infrastructure fund to invest in solar, wind, green hydrogen and battery storage technology. The government and BlackRock announced the fund in a joint statement but provided no details about its launch date.
Research
Clean energy investing in America [American Clean Power Association]
- A new report from the American Clean Power Association found that in the past year, the utility-scale clean energy industry has announced: over $270bn in capital commitments; 83 new or expanded manufacturing facilities; and over 184GW of new project capacity to be constructed.
- The U.S. Department of Energy (DOE) released its 2023 Critical Materials Assessment, determining the Critical Materials List of energy-specific critical and near-critical materials through 2035. The Assessment focuses on key materials at high risk of supply disruption that are integral to clean energy technologies. The Critical Materials List will also inform eligibility for tax credits under the Inflation Reduction Act 48C.
Nature-based Solutions
Deals and commitments above $1mn
Market Watch
Gabon, BoA offers higher yield in debt-for-nature deal [Yahoo!Finance]
- Bank of America Corp. has raised the yield on a $500 million blue bond for Gabon in an effort to drum up investor interest. The African nation and its bond arranger priced the transaction to yield 200 basis points over 10-year US Treasuries, up from initial price talk of about 180 basis points. The sinkable notes are due in 2038 and have a weighted average life of 10 years.
- The European Commission has approved, under EU state aid rules, a €350 million Finnish scheme to support sustainable forest management. The aim of the scheme is to help private forest owners implement economically, ecologically and socially sustainable forest management. Under the scheme, which will run until 31 December 2029, the aid will take the form of direct grants to private forest owners. The maximum amount of aid per beneficiary is €100,000 per project. For road embankment construction and compensation for income losses specifically, the maximum aid amount is €300,000 per beneficiary.
Research
- Agrifood systems account for almost a quarter of global GHGs, yet climate finance flowing to them is still strikingly low. In 2019/2020, agrifood systems received 4.3% of total global climate finance tracked at the project level, with an annual average of USD 28.5 billion. This report presents the first comprehensive analysis of climate finance flowing to these systems globally, with the aim of better informing decision-makers in this space. Establishing this baseline for financial flows can help to track action against the efforts required to mitigate and adapt to climate change.
- Tree planting has the potential to improve the livelihoods of hundreds of millions of people as well as to support environmental services such as biodiversity conservation and carbon absorption. The work points to significant win–win opportunities for landscape restoration and economic empowerment that can be obtained if proper consideration is given to tree function along with diversity.
Climate Finance
Deals and commitments above $100mn
Individual Deals & Market Watch
Germany to boost climate, chips fund to more than €200bn ($219.5bn) [Bloomberg]
- Germany will top up a pot to fund climate-protection measures and investment in semiconductor production by about €20 billion to more than €200 billion, according to people familiar with the plan. The investment push is part of a wider trend in Europe of governments trying to accelerate the process of cutting harmful emissions to help meet the continent’s climate targets.
German cabinet approves €58bn ($69.4bn) green investment plan for 2024 [Reuters]
- Germany's cabinet on Wednesday agreed to earmark 57.6 billion euros ($63.2 billion) for green investments next year, up 60.2% from a 2023 target, the Finance Ministry said, as Berlin ramps up subsidies to help the country become net zero by 2045. Renewable energy subsidies will be around 12.6 billion euros, while 4.7 billion euros will go towards expanding the country's e-mobility charging infrastructure.
UK pledges £3bn ($3.8bn) to support green growth in Zambia [Open Access Government]
- In collaboration with Zambia, the UK government has unveiled the UK-Zambia Green Growth Compact, a strategic initiative to bolster green investment in Zambia’s economy. The UK commits to generating up to £2.5 billion in private-sector funding from British companies, which will be channeled into Zambia’s mining, minerals, and renewable energy sectors. Additionally, up to £500 million in UK government-backed investments and up to £150 million of private sector funding for small- to medium-sized enterprises will be mobilized, driving economic prosperity in both countries.
EDP plans €2.5bn ($2.74bn) investment in DG solar globally [Renewables Now]
- Portuguese utility Energias de Portugal (EDP) pledged to invest EUR 2.5 billion (USD 2.7bn) by 2026 to install 4 GWp of distributed generation solar projects worldwide. In both Europe and the US, EDP’s distributed generation solar capacity is expected to grow around five times in the next three years through key corporate partnerships. It is also estimated to increase capacity threefold by 2026 in the APAC region, with the biggest jump planned for Brazil where they anticipate six times the growth from the current 205 MW under construction and in operation.
AB CarVal announces final close of CVI Clean Energy Fund II with $1.5bn in commitments [Cision]
- AB CarVal, part of leading global investment management firm AllianceBernstein , completed the final close of CVI Clean Energy Fund II (CEF II or the Fund) with $1.5 billion in total capital commitments to the energy transition strategy. The Fund focuses on credit and hard-asset investments in the clean energy sector, primarily in North America and Europe.
- As part of President Biden’s Investing in America agenda, the U.S. Department of Energy (DOE) announced up to $1.2 billion to advance the development of two commercial-scale direct air capture facilities in Texas and Louisiana. Together, these projects are expected to remove more than 2 million metric tons of carbon dioxide (CO2) emissions each year from the atmosphere—an amount equivalent to the annual emissions from roughly 445,000 gasoline-powered cars—and create 4,800 good-paying jobs in Texas and Louisiana.
- Swift Current Energy (Swift Current) announced that it has closed project financing for its 800 MWdc (593 MWac) Double Black Diamond Solar project. Once operational, Double Black Diamond is expected to be the second largest single phase solar project in the US and the largest solar project in MISO. Mitsubishi UFJ Financial Group (MUFG), Societe Generale, and Truist served as the coordinating lead arrangers, with MUFG and Societe Generale acting as Joint Bookrunners, for the landmark project financing, which includes $695 million in construction and tax equity bridge loans and an $84 million letter of credit facility, making it one of the largest project financings ever for a US solar project. Note: C4C's Tony Lent was a co-founder of Swift Current.
- Abu Dhabi clean energy company Masdar on Monday listed its first green bond on the London Stock Exchange to fund its new clean energy projects. Masdar completed its issuance for the $750 million green bond – 5.6 times oversubscribed with the order book peaking at $4.2bn. The company is active in more than 40 countries and aims to expand its capacity to at least 100 gigawatts by the end of the decade, with investments in or committed to projects worth more than $30 billion.
- Together, the consortium announced they have signed an agreement to acquire NeXtWind Capital Ltd (“NeXtWind”), a German renewable energy company specializing in acquiring and repowering onshore wind farms. As part of the transaction, Sandbrook, PSP Investments and IMCO will commit up to US$750 million of equity capital to NeXtWind to acquire its existing portfolio of operating wind assets and to fund future growth.
GLP Capital Partners secures $556mn for clean energy in China [Renewables Now]
- Alternative asset manager GLP Capital Partners has secured about CNY 4 billion (USD 556m/EUR 506m) in total capital commitments for a clean energy fund that will seek to invest in wind, solar, energy storage infrastructure and related energy management solutions in China.
World Bank grants $500mn for Ecuador's green development [Mirage News]
- The World Bank Board of Directors approved a US$ 500 million development policy loan for Ecuador to support government efforts to achieve inclusive, resilient and low-carbon development. The expected results of the policies supported by this operation include the identification of projects eligible for financing through green bonds, a broader reach of public services to reduce malnutrition, increased investments in non-conventional, renewable electricity and the reduction of forest loss.
- Hannon Armstrong Sustainable Infrastructure Capital, Inc., an investor in climate solutions, announced, subject to market conditions, a private offering of $350 million in green exchangeable senior unsecured notes due 2028 by its indirect subsidiaries. At issuance, these Notes will be guaranteed by the Company, Hannon Armstrong Sustainable Infrastructure, L.P. and Hannon Armstrong Capital, LLC. The Issuers also expect to grant the initial purchasers of the Notes an option to purchase, during the 13-day period beginning on, and including the first date on which the Notes are issued, up to $52.5 million additional aggregate principal amount of the Notes.
- A/O, A European venture capital firm primarily focused on built-world technologies, is doubling down on investing in technologies that aim to reduce greenhouse gas emissions, build climate resilience, accelerate the energy transition and digitalization of the real estate and construction industries as it reaches the first close of its new flagship Fund targeting €250 million.
IFC to invest $250mn in Bank of Philippines green bonds [The Manila Times]
- The International Finance Corp. (IFC), a member of the World Bank Group, is investing $250 million (approximately ₱$14.056 billion) in a green bond to be issued by the Bank of the Philippine Islands (BPI) as part of an effort to grow climate financing in the country. IFC will be the sole subscriber of the bond, which will be aligned with the International Capital Market Association's Green Bond Principles. Proceeds will be used to finance eligible green assets in the Philippines, including renewable energy, energy efficiency, green buildings, electric vehicles and climate-smart agriculture projects, among others.
- GEF Capital Partners, LLC ("GEF"), a global private equity firm focused on making investments addressing climate change and promoting sustainability, announced the final close of its "GEF LatAm Climate Solutions Fund III" (the "Fund"). Securing R$1.05 billion in committed capital, the Fund is positioned to drive transformational impact in the middle-market sector, focusing on opportunities that address climate change and pollution control and resource efficiency in Brazil. The Fund has been structured to make private equity investments in companies providing solutions to the pressing issues of climate change in the Country that are also positioned to lead the growth in sustainable initiatives across Brazil. Note: GEF Capital is also a founding member of the Brazil NbS Investment Collaborative, launched by C4C in 2022.
Israel to power Zambia with $100mn solar-wind energy project [The Jerusalem Post]
- A significant renewable energy project is underway in Zambia to establish a power station capable of generating 71 megawatts of electricity, which is a joint effort between Israel’s Gigawatt Global and Gigawatt Wind. The $100 million investment in the power station was finalized during the visit of Zambian President Hakainde Hichilema to Israel.
Nature-based Solutions
Deals and commitments above $1mn
Individual Deals & Market Watch
- The U.S. Environmental Protection Agency announced the availability of up to $206 million in funding to protect and restore the Chesapeake Bay and watershed, and advance environmental justice. EPA is seeking applications from eligible community-based organizations who can apply for funding via two Requests for Applications (RFAs) issued by EPA’s Chesapeake Bay Program Office; applications are due by mid-September.
- The Department of the Interior announced up to $195 million in funding opportunities available through President Biden’s Investing in America agenda to develop a more resilient water supply, support cooperative watershed management and safeguard aquatic ecosystems. The Bureau of Reclamation is implementing an overall $1 billion investment from the Bipartisan Infrastructure Law for WaterSMART grants to provide financial assistance to water managers to help conserve and use water more efficiently, implement renewable energy projects, investigate and develop water marketing strategies, mitigate conflict risk in areas at a high risk of future water conflict.
Tribal nature-based solutions program launch: $100mn [California Natural Resources Agency]
- The California Natural Resources Agency announced the establishment of the new $100 million Tribal Nature-Based Solutions Program. This Program was developed in response to the consultations and input received from California Native American tribes during the tribal consultations on Governor Newsom’s Executive Order N-82-20 (Nature-Based Solutions Executive Order), the Pathways to 30x30 Strategy, and Natural and Working Lands Climate Smart Strategy.
- The Department of the Interior announced over $44 million from the Biden-Harris administration’s Investing in America agenda to meet critical ecosystem resilience, restoration and environmental planning needs for the National Park Service in fiscal year 2023. These investments will support coordination across agency programs and ensure collaborative, strategic and measurable landscape-scale benefits that advance climate resilience. Note: While there's no specific private investment angle for this deal, these funds will be channeled toward biological consulting businesses - meaning large contracts for the ecological restoration market.
Supply Change Capital Closes Debut $40mn Fund to Invest in the Future of Food [Cision]
- Supply Change Capital, a venture capital firm that invests in the future of food, announced the close of its inaugural $40M Fund. One of the largest Latina-led funds, the firm has deployed over $13 million across 15 early-stage food and agriculture technology companies since June 2021. Investments include deep tech food, agriculture and ingredient companies, supply chain technology, and enterprise software. Latinx, Black, and/or Female Founder/CEOs comprise 80% of the portfolio.
- Dutch cultivated meat startup Meatable has raised $35 million in a series B round led by Agronomics, taking its total funding to $95 million as it gears up to launch pork sausages and dumplings in Singapore next year.
- The Department of Commerce and NOAA announced the availability of $20 million for state and territory coastal management programs, and $12 million for national estuarine research reserves to support projects that increase climate adaptation and coastal community resilience to natural hazards and extreme weather. The funding will help implement projects, initiatives and programs that increase climate resilience.
UK Government ringfences £14mn ($17.8mn) for sustainable farming innovation [Sustainable Times]
- The Department for Environment, Food and Rural Affairs (Defra) announced that £14 million will be allocated to sustainable agriculture initiatives through the Farming Innovation Programme. Almost £10m has been allocated in a third round of the Small R&D Partnerships competition, created in collaboration with the Transforming Food Production Challenge and managed by Innovate UK.
Climate tech startup Revalue Nature raises £8mn ($10.2mn) [Business Cloud]
- UK-based climate tech startup Revalue Nature has raised £8m ($10m) in a Series A funding round. The investment was co-led by Ecosystem Integrity Fund (EIF) and SJF Ventures, two leading venture firms focused on climate and impact. Headquartered in London, Revalue Nature develops nature-based carbon projects that protect against deforestation while enhancing biodiversity and driving local community economic development.
- The Environmental Damages Fund, built on the premise that environmental good must follow harm, provides an effective way of responding to environmental damage by directing funds to carry out projects that benefit the natural environment. The most recent round of allocated funding will support 22 projects to be carried out in seven provinces and territories across Canada and will aim to monitor, assess, and direct studies carried out on more than 19 million hectares of habitat, among other restoration actions.
Oregon approves $5mn for wildlife crossings [Environment America]
- Governor Kotek of Oregon signed House Bill 5030 which will allocate an additional $5 million to fund wildlife crossings. These crossings will address habitat fragmentation caused by human development, which disrupt ecosystems and leave species more susceptible to other challenges like disease, wildfires and climate change.
$2mn in coral restoration grants awarded to US Pacific Islands [Maui Now]
- The U.S. National Marine Sanctuary Foundation awarded grants of more than $2 million to support coral restoration in the four US Pacific Island jurisdictions of Hawaiʻi, American Sāmoa, Commonwealth of the Northern Mariana Islands, and Guam. The grants will support capacity building and/or restoration implementation.
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