Your Newsletter at a Glance
Note from the author: The green energy transition is driving investment once again. Duke Energy is planning to spend $65b over the next five years to fund the low-carbon transition and Brookfield Renewable took a $360m stake in CleanMax, a Mumbai-based supplier of renewable energy. And, BloombergNEF released their Electric Vehicle Outlook Report for 2023 with new takeaways on EV sales, battery factory spending, and energy demand.
Nature-based solutions saw the launch of an ocean-based carbon removal project led by Meta’s former CTO, Mike Schroepfer. There’s also $3.31b in funding from NOAA, the largest from the agency yet, for coastal resiliency, salmon habitat restoration, and infrastructure.
Deal Count: This week covers over $136b in deals and commitments in climate finance and $6b in NbS around the world. Enjoy the 36 summaries below!
Climate Finance
Deals and commitments above $100m
Market Watch
- Duke Energy Corp plans to spend $65 billion over the next five years with most of it going to pay for the U.S. energy company's transition to low-carbon energy sources. The company expects to spend about 55% on the power grid with much of the rest funneled toward renewable electricity generation. As part of Duke's plan, the company plans to retire all of its coal plants by 2035 when it will have about 30,000 MW of renewables like wind and solar, and about 10,000 MW of energy storage, like batteries.
Germany lines up €50 billion ($53.5b) to help heavy industry go green [Bloomberg]
- Germany plans to help energy-intensive manufacturers transition to climate-neutral technologies with roughly €50 billion ($53.4 billion) in subsidies. The program, which still needs European Union approval, would run over 15 years and be open for companies with at least 10 kilotons of carbon emissions annually. That would include manufacturers in the steel, chemicals, cement, paper and glass sectors. From the initiative, the government expects a reduction of 350 million tons by 2045 — a third of the industry’s goal.
- The government of Bangladesh and the World Bank signed two financing agreements totaling $858 million to enhance climate-resilient agricultural growth, food security, and improve road safety. The $500 million Program on Agricultural and Rural Transformation for Nutrition, Entrepreneurship, and Resilience (PARTNER) will help transform the agriculture sector by promoting crop diversification, food safety, and climate resilience across agri-food systems of Bangladesh.
Research
A look at the 5 biggest US PE impact funds [Pitchbook]
- The report compiles a list of the five largest US PE impact vehicles by fund size operating in 2023: TPG Rise Climate, Clean Technology Fund, BeyondNetZero, Trilantic Capital Partners VI, and The Rise Fund II. At the end of 2021, the impact investing market reached over $1 trillion in AUM, according to the Global Impact Investing Network, and the ecosystem has a number of private equity managers to credit for its expansion. In recent years, buyout players such as TPG, KKR and Bain Capital have raised multi million- and billion-dollar funds dedicated to measurable social and environmental impact.
BloombergNEF’s Electric Vehicle Outlook 2023 report [Bloomberg]
- The report looks at how the different segments of road transport could evolve over the coming decades and maps the impact on oil markets, electricity demand, batteries, metals and materials, charging infrastructure and greenhouse gas emissions. Their big takeaways from the report are EV sales will surge in the coming years, peaks are everywhere, battery factory spending is ahead of plan, lithium has a supply challenge, and electricity has demand from EVs.
Nature-based Solutions
Deals and commitments above $1m
Market Watch
- Funding was secured by Cantwell in the Inflation Reduction Act - includes $390M for tribal fisheries, including salmon hatcheries to help boost orca populations, and $83M to rebuild Seattle’s NW Fisheries Science Center; Cantwell: “This is a record amount of investment in salmon, salmon habitat and in salmon recovery.”
Meta’s former CTO has a new $50 million project: ocean-based carbon removal [MIT Technology Review]
- A nonprofit formed by Mike Schroepfer, Meta’s former chief technology officer, has spun out a new organization dedicated to accelerating research into ocean alkalinity enhancement—one potential means of using the seas to suck up and store away even more carbon dioxide. Additional Ventures, cofounded by Schroepfer, and a group of other foundations have committed $50 million over five years to the nonprofit research program, dubbed the Carbon to Sea Initiative. The goals of the effort include evaluating potential approaches; eventually conducting small-scale field trials in the ocean; advancing policies that could streamline permitting for those experiments and provide more public funding for research; and developing the technology necessary to carry out and assess these interventions if they prove to work well and safely.
Pluton Biosciences raises $16.5m in Series A funding for their Microbial Cover Crop [Finsmes]
- The round was led by Illumina Ventures and RA Capital, with participation from existing investors Fall Line Capital, The Grantham Foundation, and First In Ventures, as well as new investors Wollemi, Radicle Growth, and iSelect. Illumina Ventures’ Charles Lin, PhD, has joined Pluton’s Board of Directors along with RA Capital’s Michael Gillespie, MD. The company intends to use the funds to accelerate the development of its flagship product, the Microbial Cover Crop, through field trials and commercial partnerships. Pluton works to drive agriculture to a carbon-negative outcome by leveraging Micromining and genomic technologies through an approach to identify and deploy beneficial microbes and their natural products.
Research
- As per the study initiated by Evolve Business Intelligence, Regenerative Agriculture market size accounted for USD $10.1 billion in 2022, growing at a CAGR of 16.1% from 2023 to 2033. North America dominated the market in 2022, and Asia Pacific is expected to be the fastest-growing at the highest CAGR from 2023 to 2033. The regenerative agriculture market refers to the growing sector that focuses on sustainable farming practices aimed at restoring and enhancing soil health, biodiversity, and ecosystem services while improving farm productivity and profitability. Regenerative agriculture goes beyond conventional farming methods by employing techniques that rebuild soil organic matter, increase water infiltration and retention, promote carbon sequestration, and foster natural ecosystems.
Vertical farming project to develop low-cost alternative plant protein [University of York]
- Scientists from the University of York are collaborating on a new environmentally-friendly research project to use vertical farming facilities to grow amaranth - a new source of alternative plant protein. Funded by Innovate UK, the two-year project will develop methods to use vertical farming facilities to grow the plant, known for its many health benefits and numerous antioxidants and which is undervalued in the current UK food market. Researchers say amaranth production could help decrease the UK’s reliance on imports of plant proteins such as soy and pea, boosting not just the UK economy and environmental impact but also the health of UK consumers. Amaranth has been proven to be a lower-cost alternative to the more commonly used pea protein and is commonly eaten in Southern Africa, South East Asia and South America.
Climate Finance
Deals and commitments above $100m
Individual Deals & Market Watch
UK consortium to invest $9bn into Indonesian mining and EV battery industries [Mining Technology]
- A consortium of companies, including mining company Glencore, is planning to invest $9bn into mining and electric vehicle (EV) battery production in Indonesia. The mineral-rich nation is increasingly attracting interest as demand for energy transition minerals mounts. The funds will be in part dedicated to an industrial park in the Bantaeng region on Sulawesi Island that will be powered by wind energy. The park is due for completion in September.
Lower-income EU countries get EUR 2.4bn ($2.5b) to pursue green transition [Renewables Now]
- The European Commission (EC) announced that the Modernisation Fund has disbursed EUR 2.4 billion (USD $2.56bn) to 31 projects in seven EU countries, including for renewable electricity generation and grid modernisation. The fund, which supports EU member states with lower incomes in their transition to climate neutrality, has now invested a total of EUR 7.5 billion in 10 eligible countries.
- Just Climate, an investment business established by Generation Investment Management to address the net-zero challenge at scale, has announced the closing of its inaugural fund, Climate Assets Fund I. The Fund exceeded its $1 billion target, raising $1.5 billion in institutional capital to invest in the highest impact solutions that can reduce or remove emissions, while generating risk-adjusted financial returns. The Fund closed with a diverse set of institutional investors with a far-reaching geographical spread, including California State Teachers’ Retirement System (CalSTRS), PSP Investments, AP4, Colonial First State Investments, Builders Asset Management and AP2; as well as other pensions, sovereign wealth funds, insurers, financial institutions, endowments, foundations and family offices from North America, Europe and the Asia Pacific region.
Statkraft AS successfully places EUR 500 million ($534m) green bond [Yahoo]
- Statkraft has issued a EUR 500 million senior bond under its EMTN (Euro Medium Term Note) programme. The bond matures in June 2033 and pays a fixed coupon of 3.500%. The transaction was substantially oversubscribed. An equivalent amount to the net proceeds from the bond issue will be used to finance Eligible Projects as specified in Statkraft’s Green Bond Framework. Barclays, BNP Paribas, SEB and SMBC acted as joint bookrunners on the bond issue. Statkraft will apply for the bond to be listed on Euronext Dublin.
- Eolian has taken the amount of financing it has raised in just three years since founding to more than a billion-and-a-half-dollars. The US-based energy storage developer-investor said that it had closed a renewable energy green loan worth US$515 million with major international banking groups Banco Santander, MUFJ, National Australia Bank, Natixis and SMBC. The company said it secured the loan from a group of eligible green energy projects developed by it and the funds that preceded its founding in 2020 by CEO Aaron Zubaaty, backed by asset management group Global Infrastructure Partners (GIP).
Commercial Bank of Dubai set to raise $500 million with debut green bonds [Reuters]
- Commercial Bank of Dubai (CBD.DU) is set to raise $500 million through a debut sale of green bonds, its first foray into the international debt markets since 2020 that got $1.4 billion in orders. The five-year bonds will be used to finance projects eligible under CBD's Sustainable Financing Framework issued in March, which could include green buildings, renewable energy, clean transportation access to education or pollution prevention and control.
São Paulo state to invest US$430m in sustainability projects [bnamericas]
- Brazil’s São Paulo state will invest 2.13bn reais (US$430mn) in sustainability projects through 2026. The plan foresees 21 projects in six areas: biodiversity, bioeconomy and green finance, parks, environmental education, institutional strengthening, and climate resilience and adaptation. The biggest investment will go to biodiversity, with an estimated 1bn reais. By 2026, 37,500ha of vegetation will be restored through six programs already underway, such as Refloresta São Paulo and Conecta Mata Atlântica.
Ashurst advises 12 banks on $400M green bond issuance [Mirage News]
- Global law firm Ashurst advised a syndicate of 12 banks, which included Barclays, Deutsche Bank AG, Singapore Branch, HSBC, J.P. Morgan, Standard Chartered Bank, BNP Paribas, DBS Bank Ltd., Mizuho Securities, MUFG Securities, SMBC Nikko Securities and Société Générale in connection with the high yield green bond issuance by Diamond II Limited of US$400 million 7.95% senior secured notes due 2026. The issuance represented one of the first high yield issuances of bonds from India in more than a year and received strong demand from investors in the United States, Europe and Asia.
Philips Pensioenfonds aligns €370m ($396m) EM equity portfolio with SDGs [responsible investor]
- Dutch pension fund Philips Pensioenfonds has collaborated with index provider Qontigo and BlackRock to align its €370 million emerging markets equity portfolio with several SDGs. The mandate, managed by BlackRock, tracks the iSTOXX PPF Responsible SDGs Emerging Markets Index, a custom equity benchmark. The equity portfolio represents around 2 percent of the pension fund’s total assets.
Brookfield Renewable takes $360 million stake in Mumbai-based CleanMax [Impact Alpha]
- Mumbai-based CleanMax is a supplier of renewable energy to corporate consumers in India, managing 1.6 gigawatts of wind and solar projects. A $360 million equity investment from Brookfield, through its $15 billion energy transition fund, will help the company increase its installed capacity to 5 gigawatts.
- Australian airline Qantas will establish a A$400 million ($263.2m) fund to provide direct investments in climate-related projects and initiatives, with a focus on sustainability aviation fuel (SAF) and nature-based solutions.
EIB provides EUR 200m ($215m) for residential, SMEs solar projects in Brazil [Renewables Now]
- The European Investment Bank (EIB) announced it is providing a EUR-200-million (USD 215.2m) loan to Sicredi, a Brazilian cooperative financial institution, to finance the implementation of solar systems on homes, small and medium-sized businesses, and rural properties. According to EIB, the installation of photovoltaic (PV) panels will contribute 100% to climate action and support Brazil’s ten-year national energy expansion plan, which targets the increase of renewable energy in the annual electricity generation mix.
Carbon Growth Partners to raise US$200m for Carbon Growth Fund No.2 [businesswire]
- Carbon market investor Carbon Growth Partners (CGP) has reopened its Carbon Growth Fund No.2, seeking to raise US$200 million by mid-2024 including an initial US$20 million before the end of June 2023. The fund targets a 20% annual return by investing in a diversified portfolio of carbon credits and carbon offset projects. The capital raise comes as CGP announced that its first fund, the Carbon Growth Opportunities Fund, has significantly outperformed major asset classes including cash, stocks, bonds, gold and crypto, generating a 17% return to investors since inception in July 2021^.
Hong Kong insurer AIA invests $200mn into impact funds [Financial Times]
- Hong Kong-based insurer AIA plans to invest $200 million into impact funds, its first such allocation, in a sign of the growing demand among Asian investors for strategies combining financial returns with social or environmental goals. Asian investors have been putting money into the impact investment sector, with the region now accounting for almost 30% of LeapFrog’s investor base, up from less than 5% three years ago.
$150 million Energy & Climate Tech Investment Fund announced by TDK Ventures [CleanTechnica]
- TDK Ventures announced its third fund, Fund EX1. It will invest in the United States and Europe and focus on early-stage energy, cleantech, and climate technology startups. Fund EX1 has $150 million for investing in the startups it chooses to back. (TDK Ventures previously invested in companies such as Ascend Elements, AM Batteries, Type One Energy, Wheels, GenCell and Autoflight.)
Brooklyn-based Amogy increases Series B round to $150 million [MarineLink]
- Amogy announced it has raised more funds to help it commercialize and begin manufacturing its emissions-free ammonia-to-power technology for marine and industrial applications. The company aims to bring its first product to market in 2024. Amogy said its Series B-2 fundraising was joined by Marunouchi Climate Tech Growth Fund, Mitsubishi Corporation, Mitsubishi Heavy Industries America and Synergy Marine, raising $11 million. This concludes the company's Series B fundraising after its SK Innovation-led Series B-1 round raised $139 million.
- The Board of Directors of the African Development Bank Group has approved a $75 million loan to Angola to finance the first phase of the country’s Coastal Towns Inclusive Sanitation Project. The Africa Growing Together Fund (AGTF), sponsored by China and administered by the Bank, has also approved $49.4 million to co-finance the project. The funds will help Angola to improve access to climate-resilient and sustainable sanitation services in the coastal towns of Benguela, Baía Farta, Catumbela, and Lobito, with a combined population of 1.4 million. The project is part of the government’s Vision 2050 to promote sustainable and climate-resilient water and sanitation infrastructure and service.
- The Prime Minister of the United Kingdom, Rishi Sunak, has announced that his country will invest in the Amazon fund. The value will be 80 million pounds, about R$500 million. The Prime Minister stated that the UK’s entry into the fund is recognition of the work and leadership of President Luiz Inacio Lula da Silva in the area of environmental conservation.
Research, Frameworks, & Case Studies
Brazil’s bill will allow loggers to earn $24m from carbon credits
- Brazil’s Congress passed a bill that will make carbon credits available to private companies with forest concessions, serving a first step in regulating the voluntary carbon market in the country. The new policy is expected to boost revenue by 43% while generating around $24 million per year from carbon credits.
‘India’s green energy sector to attract $800 bn investment’
- Bank of America predicts that investment in India's green energy sector could reach $800bn over the next decade, with Indian corporates, foreign investors and sponsors contributing. The country is a natural destination for strategic investors aiming for net-zero targets, said Debasish Purohit, co-head of investment banking for Bank of America in India. The bank expects $250bn investment in the renewable energy sector, $250m in batteries, and $300bn in total investment for supporting grid infrastructure, green hydrogen, equipment and systems. Reliance Industries, Adani and the Tatas have all outlined green energy investment plans.
UK energy transition can create more new jobs than lost: Study [Rigzone]
- The study argues that the move to net zero emissions has the potential to create more jobs than will be lost, but will require active intervention by the government, according to a recent report by the UK’s Climate Change Committee (CCC). Between 135,000 and 725,000 net new jobs could be created by 2030, the report said. These new jobs would be found in low-carbon sectors such as buildings retrofit, renewable energy generation, and the manufacture of electric vehicles, the CCC said, adding that the transition is “an opportunity for growth in high-quality jobs, distributing opportunities across UK regions.”
Nature-based Solutions
Deals and commitments above $1m
Individual Deals & Market Watch
Biden administration announces $2.6 billion toward coastal climate resilience [The Hill]
- The Commerce Department announced it will put $2.6 billion toward coastal climate resilience in funds from the Inflation Reduction Act (IRA). The funds will include about $400 million for tribal communities in support of habitat restoration, fish hatcheries and Pacific salmon. and those in the direct path of climate change. Another $349 million will go specifically to climate resilience in fisheries, while another $60 million will go toward climate-resilience job placement and training.
Sam Altman backs British alt meat startup in $30m raise [Sifted]
- Cultivated meat startup Uncommon, formerly known as Higher Steaks, has raised a $30m Series A round from investors including LowerCarbon, Balderton and Sam Altman, the CEO of ChatGPT-maker OpenAI. Foodtechs and particularly cultivated meat companies — which use stem cells to produce meat like substances in the lab — have seen an uptick in investor interest over the last three years. Uncommon is based in Cambridge and is developing “bacon” and “pork belly” products. Its round is one of the largest in the sector in Europe, following a €48m Series A raised by Parisian startup Gourmey in October last year.
The EU grants $16.5 million dollars for the protection of biodiversity [Afrik21]
- The European Union (EU) is providing further support for the protection of Liberia's biodiversity. The EU signed a $16.5 million financing agreement with the Liberian government. The funds will be used to finance reforestation and sustainable forestry activities. It will promote job creation and income generation through the sustainable use and conservation of natural resources. Agroforestry, firewood planting, multi-purpose nurseries and the formalization of chainsaw millers are the targeted activities.
- MyForest Foods raised the funds from Ecovative, the mushroom packaging parent company it spun out of in 2020. Ecovative recently raised a series E funding round totaling $30 million and led by Viking Global Investors. MyForest, formerly known as Atlast Food Co, closed a $ 40 million Series A round in 2021 which famously included Hollywood actor Robert Downey Jr’s Footprint Coalition Ventures. In April 2022, the startup secured a $15 million venture loan from Connecticut’s Horizon Technology Finance Corporation which it said was used to finance further production facility built-outs.
Korean cell-cultured seafood startup raises $13 million [The Fish Site]
- Cellmeat, a South Korean cell-cultured seafood company with a focus on shrimp and caviar, has secured a total investment of 174.17 billion won ($13 million). Domestic and foreign investors such as NH Venture Investment, Genting Ventures, and Daewoo Healthcare participated in the Series A, as well as existing investors BNK Venture Investment, Yoo Kyung PSG Asset Management and Strong Ventures. Cellmeat has completed its own development of non-animal serum-free cell culture, which is said to be the core of the cultured meat industry, and has developed the mass cell culture technology essential for the economic viability of the product.
- Teck Resources Limited announced a CAD$10 million donation to the Chilean Nature Fund to support Chile’s Protected Marine Areas program and protection of a critical global biodiversity area. Funding will help FNC and the community of Juan Fernández design and implement protection and conservation measures in the archipelago, including the protection of rare seabirds and unique flora and fauna not found anywhere else in the world.
- Fazla is a Turkish food waste management company, reducing waste and waste-borne carbon emissions across the supply chain. The B Corp firm has successfully saved over 58,000 tons of food from being wasted and prevented 83,000 tons of carbon emissions. Founded in 2016 by Olcay Silahlı and Arda Eren, the company has announced it has raised a $6 million investment at a $43 million valuation as it begins to make an impact on waste management in the Spanish market.
£3.25 million ($4m) for the revival of woodlands along the HS2 route in the UK [RailBusinessDaily]
- The HS2 Woodland Fund has re-opened for applications, supporting projects that create and restore woodland along the High Speed Two (HS2) Phase One route. The HS2 Woodland Fund has reopened to new applications, with £3.25 million available to support woodland creation and the restoration of plantations of ancient woodland sites (PAWS). First launched in November 2017 and managed by the Forestry Commission on behalf of HS2 Ltd, the fund is available for landowners located up to 25 miles from phase one of the route from London to the West Midlands.
- UK-based impact fund Sentient Ventures has announced its first three investments — all into female-founded companies. A combined £2 million has been invested into dairy-free cheesemonger La Fauxmagerie, vegan pizza chain Purezza, and plant-based chicken brand Rebellyous.
- New York-based biomaterials startup, Uncaged Innovations, has successfully raised $2 million in a pre-seed funding round. The investment comes from InMotion Ventures, the investment arm of Jaguar Land Rover (JLR), along with other notable investors including VegInvest, Stray Dog Capital, Alwyn Capital, Hack Capital, and GlassWalls Syndicate. JLR has also backed the investments of Carmoola and Envisics this year.
Cascadia Seaweed secures $1.5 million funding from CICE [The Fish Site]
- Cascadia Seaweed has secured funding support from the British Columbia Centre for Innovation and Clean Energy to accelerate the commercialisation of large-scale agrifeed and biostimulant products. The funding will be used to fast-track the commercialisation of its agricultural products to reduce greenhouse gasses and aim to improve food security.
- Alabama’s HudsonAlpha Institute for Biotechnology and several regional collaborators, including three Alabama universities, were awarded $1 million from the National Science Foundation (NSF) to create opportunities for the Southeast in carbon-neutral crop technologies. The funded project, entitled “Advancing carbon-neutral crop technologies to develop sustainable consumer goods (AL, GA, NC, TN)” – “Greening the Southeast” for short – aims to develop a green bioeconomy for building materials and consumer goods that reduces climate change impacts from manufacturing by eliminating industry reliance on petroleum and environmentally costly fibers.
Research, Frameworks, & Case Studies
Pension funds missing out by not investing in biodiversity [PensionsAge]
- A report from Pensions for Purpose and Gresham House has suggested that pension funds could be missing out on bolstering their environmental, social and governance (ESG) credentials and better diversifying their portfolios by not investing in biodiversity. The report includes findings from a recent survey of a number of high-profile funds and consultants, including Nest, the Tesco Pension fund, Aon and Mercer, which showed that at least 62 percent of UK pension funds are not invested in natural capital solutions, despite growing awareness of biodiversity risks. The report also showed that most respondents to its survey agree that addressing biodiversity risk is at least as crucial as tackling climate change, with some considering it an even more significant threat. Challenges with data and availability of investment products, however, make it difficult to understand and address biodiversity loss through direct investment.
Powering the blue economy with blue finance [Eco-Business]
- The article notes that the ‘natural capital’ of the blue economy holds an estimated value of around US$$25 trillion while the annual value of goods and services produced amounts to approximately US$$2.5 trillion. They argue that, to ensure a smooth transition of finance from green initiatives to blue initiatives, it is essential to build capacity within the financial sector on a fundamental understanding of the ocean economy and risk assessment. To expedite investments in the oceans, tools like the Sustainable Blue Economy Finance Principles introduced by the UN Environment Programme Finance Initiative can play a crucial role. The blue economy holds enormous potential for sustainable development, but unlocking it requires substantial financing and strategic investments. Overcoming challenges related to funding gaps, capacity limitations and inadequate enabling frameworks is crucial.
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