Exclusive-BlackRock raises $ 673 million for climate-focused infrastructure fund

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By Simon Jessop and Ross Kerber

GLASGOW / BOSTON (Reuters) – BlackRock Inc told Reuters it had raised $ 673 million for an infrastructure fund with backing from the French, German and Japanese governments to invest in climate-focused projects such as renewables in emerging markets.

The world’s largest fund manager hopes the fund, which will be announced on Tuesday and dubbed the Climate Finance Partnership, will show how to mobilize private capital in developing countries to tackle climate change, a sticking point during climate negotiations. United Nations underway in Glasgow. Investwe were wary of investing into risky projects with no more certainty that they will get a return.

Public development banks from France, Germany and Japan and philanthropic institutions such as the Grantham Environmental Trust and the Quadrivium Foundation provide 20% of the fund’s capital and have agreed to take losses before others investus.

While a number of multibillion-dollar renewable energy funds have been raised over the past year to help build solar, wind and other projects, most of it has been spent in richer countries. offering investou less risk.

in emerging economies, excluding countries in Africa, Asia and Latin America, it will take around $ 1 trillion per year until 2050 to help them transition to a low emission economy. carbon, BlackRock said. In 2020, only $ 150 million was invested China.

BlackRock and the other funders of the fund are trying to mobilize more support for such initiatives focused on emerging markets at the UN Climate Change Conference COP26 in Glasgow. The new fund could help developed countries meet their goal of raising $ 100 billion a year to help poorer countries tackle climate change.

Among the 22 backers of the fund were the French energy company TotalEnergies and institutional investou including AXA and Dai-ichi Life Insurance. The fund has far exceeded its fundraising goal of $ 500 million, BlackRock said.

“This partnership is proof that governments, philanthropic organizations and institutions investWe can come together to raise capital on a large scale in emerging markets, which are most exposed to the impact of climate change, ”Larry Fink, President and CEO of BlackRock, said in a statement. Fink has already called for linking public and private funding to fight climate change.

The fund has a typical shelf life of 10 years with a term of five years investlying period, with average fairness investprobably between $ 25 million and $ 75 million, David Giordano, Global Head of Renewable Energy at BlackRock Alternative Investors, told Reuters.

“One of the key things we talked about with our partners in 2018, when we started down this path, was really to come up with something that was simple but gave that feeling of reducing emerging market risks,” said Giordano. .

Kenya, Morocco and Egypt were all attractive for investment, as were Peru and Vietnam, where the government was “really committed” to the energy transition, said Giordano.

Renewable energy in non-OECD countries is expected to account for 49% of global energy capacity by 2050, Edwin Conway, Global Head of BlackRock Alternative Investou said.

“Now that’s huge… I think we’re talking decades, in terms of the opportunities that lie ahead,” Conway said.

(Reporting by Simon Jessop in Glasgow and Ross Kerber in Boston; editing by Matthew Lewis)


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