Your Newsletter at a Glance
Commentary by C4C
Straight to the highlights!
Governmental action:
- Brazil to take on undesignated land the size of Spain to focus on Indigenous lands and conservation.
- Indonesia launches its first carbon emission credit trading scheme.
- The Philippines Securities and Exchange Commission issues new bond guidelines for the blue economy.
- Singapore works with McKinsey to show how high-integrity carbon credits can be used to retire coal-fired power plants.
- Zimbabwe looks to grow a biodiversity economy.
Climate knowledge leadership:
- GFANZ is soliciting your insight on its transition finance strategies.
- Researchers at University of British Columbia teach us about ‘Pop-Up’ restoration, and how Indigenous-led practices can improve the outcome of poor conservation outcomes.
- Nature for Climate and FFAIR reminded us actions speak louder than words, with both showing company commitments to nature-based solutions falling short of follow through.
- IEA’s landmark Net Zero Roadmap gets an update.
In deal flow and commitment news, this week sees agriculture dominate the NbS space, taking 88% of the funds. Energy is slow with only $8.5bn across North America, Europe and India, with the latter receiving $2.5bn. Green bonds keep going, even in the face of a UK policy setback, totaling $4.1bn. The world’s largest beef producer, JBS, breaks ground on a $62M cultivated meat research facility in Brazil.
C4C News and Events
Learn more about what we're doing
On September 28th, Capital for Climate held the first in its series of educational Investment Opportunity Roadshows. The virtual event focused on Brazil, with 11 entities presenting to 70 international investors on solutions in agroforestry, the forest bioeconomy, regenerative agriculture, ecosystem restoration, restoration of degraded pastureland, nature tech, and more.
The next roadshow event will be held in person in Sao Paulo, Brazil, Nov 7th - 9th 2023, and will feature over 20 investable opportunities. Qualified investment principals are welcome to express interest to attend. Note: there are only 50 seats available.
Research and Knowledge Sharing
Grow your climate finance expertise
Climate
- The comprehensive update to IEA’s landmark Net Zero Roadmap shows that limiting global warming to 1.5 °C is still possible, but that greater ambition and implementation, supported by stronger international cooperation is critical. Recall during Climate Week NYC, the Inevitable Policy Response forecasted we are likely on track to 1.8 C.
AIIB Unveils Climate Action Plan, Reinforces Commitment to Tackle Climate Change [AIIB]
- Asian Infrastructure Investment Bank (AIIB) launches its inaugural Climate Action Plan (CAP), setting ambitious targets, committing to allocate at least 50 percent of its annual financing approvals as climate finance by 2025. AIIB's CAP outlines four principles: Meeting Differentiated Member Needs for a Just Approach on Climate Finance, Taking a Holistic Approach, Mobilizing Capital, and Facilitating Technological Innovation.
- The Glasgow Financial Alliance for Net Zero (GFANZ) Secretaria is requesting consultation on its paper “Defining Transition Finance and Considerations for Decarbonization Contribution Methodologies.” The public consultation will run for six-weeks until November 2, 2023 and feedback from all stakeholders will be considered. The final report will be published by COP28.
Indonesia's president inaugurates carbon emissions credit trading [Reuters]
- Indonesian President Joko Widodo launches the country's first carbon emission credit trading activity. Thirteen carbon credits representing nearly 460k metric tonnes of carbon dioxide equivalent (CO2e) from PT Pertamina Geothermal Energy's (PGEO.JK) projects in North Sulawesi were traded at the opening ($4.51/tonne). The buyers were some of Indonesia's largest banks such as Bank Central Asia (BBCA.JK) and Bank Mandiri (BMRI.JK), among other entities.
- The Monetary Authority of Singapore (MAS) and McKinsey & Company today jointly published a working paper setting out how high-integrity carbon credits can be utilized as a complementary financing instrument to accelerate the early retirement of coal-fired power plants (CFPPs).
What happened at Climate Week and why it matters for financiers [WE Forum]
- The World Economic Forum takes a moment to review two major conversations happening at the summit: 1) Solving the bankability challenge and creating new decarbonization markets, and 2) Closing the gap with emerging economies. Key findings? More focus on scaling technology solutions, and more collaborative and tailored financing for emerging economies. Nice 9 minute listen available for those on the fly.
Nature-based Solutions
Philipines' SEC issues new guidelines on blue bond issuances [Philstar Global]
- The Philipines' Securities and Exchange Commission (SEC) issued new guidelines for the issuance of blue bonds to encourage more companies to raise funds through this route. Eligible blue projects, according to the SEC guidelines, include ecosystem management and natural resources restoration of coastal, marine, river, lake, and other marine- or water-based ecosystems. Projects also include sustainable fisheries management and sustainable aquaculture, which directly aim to address sustainable water management and ocean protection.
The Four Labours of Regenerative Agriculture: Paving the way towards meaningful commitments [FFAIR]
- FFAIR ,a leading NGO focused on humane food supply, produced a thematic report on regenerative agriculture assessing regenerative agriculture commitments across publicly listed agri-food companies, and evaluating whether these are meaningful enough to deliver climate, nature and social goals. A group of 79 global food and retail giants, worth over $3 trillion and representing almost a third of the sector were studied., Of this group, 63% mention regen ag, 23% have targets on the subject, and only 8% have specific targets to financially support deployment of practices.
- The Global Innovation Lab for Climate Finance (the Lab) endorsed six innovative financial instruments to unlock USD 795 million for climate action in challenging sectors such as climate resilience, conservation, and housing. Six solutions are set to deploy blended finance across Morocco, Kenya, Brazil, India, and other emerging economies, with the Lab cohort already raising $9mn. CPI acts as the Lab's Secretariat. Check out the cohort at Virtual Demo Day on October 19th.
Zimbabwe aims to grow a biodiversity economy [Farmer's Week]
- In an effort to mainstream the value and contribution of nature in development planning and policy development, the Zimbabwean Ministry of Environment, Climate, Tourism and Hospitality, supported by the African Wildlife Foundation (AWF), announces the landmark Zimbabwe Biodiversity Economy Report, which seeks to address challenges underpinning biodiversity loss and to position the biodiversity economy as a key sector for investment.
- Researchers from University of British Columbia evaluate how applying an Indigenous Food Systems lens to ecological restoration may provide a framework to remedy pop-up restoration (one-off events with no continued resources or commitment). Results suggest that applying an Indigenous food systems lens to ecological restoration may provide a tangible framework for resolving some of the issues faced in top–down colonial policies common in pop-up restoration contexts.
- Wow. An area the size of Spain corresponds to federal lands in Brazil without a specific allocation. The government has now identified and georeferenced this area and will adopt a series of measures that include the demarcation of Indigenous lands, Quilombola territories, environmental conservation units, extractive reserves and agrarian reform settlements.
- A recent update of Nature4Climate’s NbS Commitment Tracker found more than half (52.5%) of all commitments tracked have published little to no evidence of progress and only 14 out of 127 commitments (11%) have language or specific initiatives mentioning Indigenous Peoples and Local Communities (IPLCs).
Climate Finance
Deals and commitments above $100mn
Individual Deals & Market Watch
Poland's Baltic Power offshore wind project reaches close ($5.0bn) [Renewables Now]
- All funds have been secured for the investment in the 1,140-MW Baltic Power wind farm in the Baltic Sea, Poland’s most advanced offshore wind development, the project partners said on Friday. The overall cost, estimated at about EUR 4.73 billion (USD 5.05bn), is covered with debt by a consortium of 25 lenders, including the European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), Euler Hermes, Export and Investment Fund of Denmark and Export Development Canada.
UK Green Bond Sale Demand Holds Up After Sunak’s Climate Pivot ($3.7bn) [Bloomberg]
- Demand for the UK’s green bonds is holding up after speculation that PM Sunak’s changes to climate policies might hurt investor interest. In a recent sale, the nation distributed £3 billion ($3.7 billion) of bonds due 2033 as targeted, with investors offering to buy 2.56 times the amount of securities available.
- Denmark, the Netherlands and Spain join the Just Energy Transition Investment Plan, according to an announcement at the recent Presidential Climate Commission briefing, which increases funding commitments from $8.5bn to $11.8bn. The announcement also acknowledges the money pledged was conditional on the implementation plan being finalized and rolled out, with a projected timeline of Q4 this year.
Solaria secures EIB debt for 5.6 GW of solar in 3 EU markets ($1.8bn) [Renewables Now]
- Spanish solar energy producer Solaria Energia y Medio Ambiente SA (BME:SLR) will receive up to EUR 1.7 billion (USD 1.82bn) in European debt funding to back the construction of roughly 5.6 GW of photovoltaic (PV) projects across three countries, Spain included. The structure of the deal, already approved by the EIB, involves the signature of several loans and the participation of several financial institutions.
British International Investment eyes $1bn investment in India clean energy projects [Reuters]
- The UK government's development finance institution British International Investment (BII) plans to invest about $1 billion in Indian climate-related projects by 2026. BII invested over $300 million in climate finance last year in sectors such as renewable energy, electric mobility and sustainable agriculture, with its current portfolio in India valued at $2.2 billion in over 290 businesses.
Brookfield to spend $845mn on new Indian platform with Axis Energy [Renewables Now]
- Axis Energy Ventures will contribute its existing development pipeline of wind and solar projects, while Brookfield will provide up to USD 845 million (EUR 802m) of equity capital towards the development and construction of the projects, according to a joint statement by the companies.
- India’s Serentica Renewables, a decarbonization platform, secures Rs. 3,000 crores ($360.9 million) in debt from power sector lender REC Limited, just days after raising $310mn from Power Finance Corp. With the new funding, Serentica will install 4 GW of renewable energy capacities across the country.
Spain's Bruc secures EUR 600m ($635.8mn) to fund 8.5 GW of home wind, solar [Renewables Now]
- Spanish renewables owner and investor Bruc signs a financing agreement to raise funds for the construction of 8,500 MW of solar photovoltaic and wind power projects in Spain. The agreement sees seven entities extend EUR 600 million (USD 635.8m) in financing, with Banco Santander, ING, Instituto de Credito Oficial, BNP Paribas, and Intesa Sanpaolo acting as bookrunners and mandated lead arrangers (MLAs) and Schroders Capital and Infranity as MLAs.
Michael R. Bloomberg Doubles Down with Additional $500mn for climate finance [Bloomberg]
- UN Special Envoy on Climate Ambition and Solutions Michael R. Bloomberg announces an additional $500 million commitment to expand the Beyond Carbon campaign. Beyond Carbon will focus efforts towards U.S. cities, states, businesses, and more to transition away from carbon pollution in the following areas: “finishing the job on coal”, slashing gas plant capacity by half and blocking all new site proposals, and increasing clean energy four-fold.
Tanzania's NMB Bank opens $400mn green bond program [Reuters]
- Tanzania's NMB Bank (NMB.TZ) is launching a 10 year multi currency medium term bond of 1 trillion Tanzanian shillings ($400 million) under a green bonds initiative for projects in renewable energy, energy efficiency, green transport and waste-water treatment. The bond will be for a period of three years and it will come with an annual interest rate of 9.5% to be paid quarterly, NMB said, and it will be on sale until Oct. 27.
DOE Announces $264mn for Basic Research in Support of Energy Earthshots™ [DOE]
- The U.S. Department of Energy (DOE) announces $264 million in funding for 29 projects to develop solutions for the scientific challenges underlying DOE’s Energy Earthshots™ Initiative to advance clean energy technologies within the decade. Learn more about the agency's Energy Earthshots Initiative and the important work that's being done to scale climate tech.
BXVentures Raising $250mn To Back Climate Tech “Trapped” In Universities [Forbes]
- BXVentures, a New York-based climate venture studio, announces a new fund of up to $250 million to back early-stage climate tech start-ups. The studio seeks out budding technologies that can be established as companies and helps in building them into commercial entities.
VSB secures EUR 211mn ($223.4mn) to repower German wind park Elster [Renewables Now]
- German renewables developer VSB Group secures a EUR-211-million (USD 223.6m) loan to repower the Elster wind park in Saxony-Anhalt, more than tripling the site’s capacity to 105.6 MW.
Alcazar Energy to invest $200mn in wind farm in Montenegro [Reuters]
- Renewable energy investor Alcazar Energy announces plans to invest $200 million in building a 118-megawatt (MW) wind park in Montenegro, which would be the largest such farm in the Adriatic country.
Enel wraps up $142mn ($150.3mn) sale of half of Aussie renewable ops [Renewables Now]
- Italian utility Enel SpA (BIT:ENEL) announces that it completed the sale of a 50% stake in its Australian renewable energy business, which operates 310 MW of installed gross solar capacity, to Japanese oil and natural gas producer Inpex Corp (TYO:1605).
Avangrid agrees $100mn PTC transfer under new IRA framework [Renewables Now]
- US sustainable energy company Avangrid Inc (NYSE:AGR), agrees to transfer an estimated USD 100 million (EUR 95m) of 2023 production tax credits (PTCs) from 1,134 MW of wind farms to energy trader Vitol Inc, taking advantage of a new transferability option in the Inflation Reduction Act (IRA).
Nature-based Solutions
Deals and commitments above $1mn
Individual Deals & Market Watch
- The U.S. Department of Agriculture (USDA) makes more than $3 billion in funding available for agricultural producers and forest landowners nationwide to participate in voluntary conservation programs and adopt climate-smart practices in fiscal year 2024 as part of President Biden’s Investing in America agenda.
Paine Schwartz Partners Closes $1.7bn Food and Agribusiness-Focused Fund VI [Cision]
- Paine Schwartz Partners announces the final closing of Paine Schwartz Food Chain Fund VI, L.P. ("Fund VI") at $1.7 billion of total capital commitments, $0.2bn over the original target. The closed fund is exclusively focused on sustainability in the ffood and agribusiness sector across two core themes: productivity and sustainability, and health and wellness.
- Environment Bank of the UK will offer Biodiversity Credits for nature-centric investments as the institutes’ newest natural capital asset class, built upon the same robust principles that underpin the biodiversity net gain (BNG) statutory frameworks in England. The credits secured an initial £240m (~$300m) investment from the Gresham House British Sustainable Infrastructure Fund, allowing delivery on long-term recovery projects forward-funded for their full lifetime. This is one of the first times we have seen substantial backing for biodiversity credits.
- Matt Damon announces plans for a series of funds via his clean water-focused venture, WaterEquity, focused on building climate-resilient water and sanitation infrastructure. This will include a $200 million target raise to kick off the project. Prior to this new initiative, the fund claims to have raised $350mn for their endeavors.
- JBS, the world’s largest meat producer, is moving into cultivated meat in a big way. The $62M innovation center is to be located at Sapiens Parque innovation hub in Florianópolis, Santa Catarina, and scheduled to open at the end of 2024, the JBS Biotech Innovation Centre aims to be a model facility to produce cultivated meat efficiently, scalable, and at competitive prices.
traceless materials Raises €36.6mn ($38.8mn) in Series A Funding [Finsmes]
- traceless materials, a Germany-based bioeconomy startup that provides technology that turns agricultural industry plant leftovers into natural low-footprint biomaterials, raises €36.6M in Series A funding. The round was led by UB Forest Industry Green Growth Fund (“UB FIGG”) and SWEN CP’s Blue Ocean fund, with participation from GLS Bank, Hamburg, Hamburger Sparkasse, Planet A Ventures, High-Tech Gründerfonds (HTGF), and b.value.
New £25m ($30.5mn) natural flood management scheme open to farmers [Farming UK]
- Farmers and landowners can now apply for £25 million worth of funding to spearhead projects that use nature to protect communities from flooding. The ring-fenced funding, provided by the UK government and the Environment Agency, will support natural flood management schemes across England.
- Austrian company Kern Tec, which uses upcycled fruit pits to produce sustainable plant-based foods, raises €12 million in funding in a Series A. The round was led by Telos Impact, with participation from the PeakBridge Growth 2 fund and the European Innovation Council (EIC) Fund.
The agritech startup Evja closes an investment round of EUR 4.2mn ($4.5mn) [CDP]
- Evja offers fruit and vegetable producers a patented precision agriculture system that allows them to optimize irrigation, nutrition and defense using predictive agronomic models and artificial intelligence. Evja closes a pre-series-A round of 4.2 million euros led by Cdp Venture Capital Sgr through the Italia Venture II fund, the SEFEA Impact Sgr fund, in addition to the partner Startupbootcamp Foodtech SRL.
- The Department of Commerce and NOAA announce $3.9 million to the Marine Technology Society (MTS) to establish a multi-year framework to engage the Ocean Enterprise. The Ocean Enterprise includes public, private, non-profit, tribal and academic entities that provide ocean observation, measurement and forecasting data or deliver operational ocean information products and services.
- La Vie, the French producer of plant-based pork products, has exceeded its €1 million crowdfunding target within just over an hour of launching the campaign. The news is the latest for La Vie, which has achieved 379% year-on-year growth and sold 2.5 million products over the past 18 months. The campaign will run until October 3.
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