Sustainable Investment News Briefing: Sustainable Ag Keeps Growing & Institutional Investor Capital Flows to Green Projects

Ag-tech companies are attracting millions of investor dollars, and some are using the cash to turn abandoned steel mills into productive vertical farms. Indeed, indoor farming continues to expand across the country, with more farms being built and more farming companies raising millions of dollars in venture funding to expand even further.

Meanwhile, other green energy and other sustainability-focused companies are also raising money from investors anxious to ride the building wave of cleantech investments. This news roundup captures just some of the recent activity in the space, from hydrogen-powered cities across South Korea to a French energy giant investing in Chinese  cleantech to a startup raising cash to build more robots for hat work in recycling plants.

Indoor Farming Continues to Take Off, While Facing Challenges

The city of Baltimore is turning abandoned industrial sites into massive indoor vertical farms, the Washington Post reports in an article about Baltimore and the entire indoor farming industry — and what the article calls the “global craze for decentralized indoor food production.”

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The Post focuses on Gotham Greens and Bowery Farming, two leaders in the space that are each building facilities in Baltimore on a site that used to be home to a sprawling steel plant that closed in 2012.

The article also points to other vertical farms under development, including a $100 million greenhouse in Morehead, Ky., that will grow tomatoes and cucumbers when it opens next year, complete with what the Post says will be “the world’s largest LED installation for a single building.” Another farming company, Plenty, will open a vertical farm “about the size of a soccer field” in southern California next year.

The industry is also facing plenty of challenges, including the U.S. Department of Energy’s proposed reversal of energy efficiency standards. Indoor farms depend on LEDs, and increasing energy efficiency standards have led to plummeting prices for LEDs. If those standards are reversed, there is a fear that LED prices will stop falling, which will wreak havoc on growth projections for indoor farming.

The article notes that Gotham Greens, which opened its first greenhouse farm in 2011, now runs 500,000 square feet of indoor farm space in five states. The Baltimore farm will be the firm’s eighth and its biggest to date: it’ll be 100,000 square feet at first but will have room to expand to 400,000 square feet over time, the Post says.

Singapore’s Temasek boosts its investments in US ag-tech: Meanwhile, Bowery says it’s raised $50 million in a Series B extension round, led by the Singapore government’s investment company Temasek. Bowery, which currently runs two farms in New Jersey, has raised more than $170 million so far, including a $90 million Series B round last year that was led by GV, the company formerly known as Google Ventures; Temasek took part in that round as well. Also last year, Temasek participated in a $70-million Series B round for Pivot Bio, an ag-tech startup that uses machine learning and computational modeling to help microbes provide plants with the right amount of daily nitrogen. Breakthrough Energy Ventures led that funding round.

San Diego algae-food producer to expand in Asia: Triton Algae Innovations, a San Diego-based ag-tech startup, has received regulatory approval for its dried algae to be used as an ingredient in food products in Singapore. The company is currently scaling up a semi-commercial production facility in the U.S. and says it is in discussions with “several prominent Asia-based food companies” about getting its non-GMO algae into the Singapore market. Triton also sees Singapore as a “potentially critical platform for establishing a broader footprint” across Asia.

FUNDRAISING/NEW FUNDS

GIP targets $5B for emerging markets fund: Global Infrastructure Partners is looking to raise $5 billion for its first emerging markets fund. The fund will invest across Latin America and Asia, excluding India, in areas including water and waste, energy and transportation. The new fund will  be managed by former World Bank president Jim Yong Kim and former International Finance Corp. CEO Jin-Yong Cai.

France’s Total backs Chinese energy fund: French energy company Total and the government of Chinese province Hubei have invested the equivalent of about $117 million in Cathay Capital Private Equity’s Smart Energy Fund. The fund will invest in emerging technologies and new business models, such as renewable energy, energy storage, distributed energy and smart energy. Cathay Capital announced the fund’s launch last year, saying it hopes to eventually raise about $250 million.

Climate-related private equity fund gets $1B goal: RockCreek Group wants to raise nearly $1 billion for a new climate-related private equity fund. The fund will focus on “relatively established” private companies that work in the clean energy and water sectors, including those involved in natural gas, which RockCreek views as a transitional energy source. CEO Afsaneh Mashayekhi Beschloss says the new fund could see annualized returns of around 12%.

Robotics recycling company gets Sequoia cash: Sequoia Capital led a $16 million Series A funding found for AMP Robotics, which develops artificial intelligence and robotics for the recycling industry. Denver-based AMP says it will use the funding to scale up and develop new products aimed at improving the economics of recycling. AMP’s seed investors include Sidewalk Infrastructure Partners, which spun out of Sidewalk Labs with backing from Alphabet and the Ontario Teachers’ Pension Plan.

Gates-backed grid control startup gets new funding: Varentec, a startup that’s backed by Khosla Ventures and Bill Gates, says it got $5 million in growth funding from WindSail Capital. San Jose-based Varentec, which develops advanced power electronic-based systems for electric grids, says the funding will help it accelerate commercial deployment of its grid control technologies. CEO Guillaume Dufossé says the firm intends to “establish distributed intelligence as mainstream through utility-owned, decentralized control solutions.” Boston-based WindSail Capital focuses on energy innovation and sustainability.

Tata Cleantech to finance renewable energy in India: Tata Cleantech Capital will launch a debt and alternative investment fund that will finance renewable energy projects across India. The firm is talking to investors about an infrastructure fund with about $40 million in capital, and wants to raise some $100 million for the other fund. Tata Cleantech, a joint venture between Tata Capital, the IFC and the World Bank, has already raised $170 million this year. The Asian Infrastructure Investment Bank will invest $75 million in the cleantech company.

Dutch investment bank backs fund for clean energy: The Netherlands Development Finance Company, or FMO, committed $2.8 million to the Acumen Fund, an impact investor that provides capital to innovative seed or early stage companies in low-income and emerging markets, particularly in India. Acumen will use the money for its Pioneer Energy Investment Initiative, which backs companies providing renewable off-grid energy.

SUSTAINABLE FINANCING

Climate risk now a factor for Natixis credit investments: Asset manager Natixis is now taking climate risk into account when it’s considering what credit investments or loans to make. Deals that are considered to have a negative environmental impact will be required to have a greater return on investment than a “greener” deal, if the manager is to invest in it. The purpose, says Orith Azoulay, global head of the Natixis CIB green and sustainable hub, is to “measure, monitor and steer the progressive greening of our balance sheet and activity.”

Apple issues $2.2B in green bonds: Apple issued one of the biggest corporate green bonds that Europe has ever seen with the floating this month of €2 billion (about $2.2 billion) in green bonds. The tech giant says the money will help it to use greener materials in its products, conserve resources and reduce its carbon footprint. Green bond issuance this year has already exceeded the record $135 billion issued last year, and experts think the green bond market will only grow. For its part, Apple previously issued $2.5 billion in US dollar-denominated green bonds, and last year hit its goal of having all of its sites worldwide be powered by clean energy.

Singapore makes moves to become sustainable finance hub: Singapore is launching a $2 billion green investments program that will encourage green lending and help the city-state become a global hub for sustainable finance. The program, overseen by the Monetary Authority of Singapore, will target projects with a “strong green focus” as well as asset managers that want to step up their green finance activities and capabilities in Singapore. The program comes three years after the authority began offering grants of about $70,000 to help companies make their bond offerings green-compliant.

Renewable energy platform in India launches with $500m: Sweden’s EQT Partners and Singapore’s Temasek will pair up to launch a green energy platform in India. The two sponsors will put up a combined $500 million as seed capital for the platform, which will build or acquire wind and solar farms across India. EQT and Temasek also joined forces in 2017 on a range of infrastructure projects across the Asia-Pacific region.

Additionally, Temasek announced that it will start reporting its air miles, water, paper and electricity usage from this financial year as part of its effort to halve the greenhouse gas emissions of its entire portfolio by 2030.

SUSTAINABILITY PROJECTS

JFK airport to get solar+storage: New York’s JFK airport will soon be home to the biggest solar project in the city, as SunPower and Goldman Sachs Renewable Power Group have won a contract from the Port Authority of New York and New Jersey.  SunPower will install 13 megawatts of solar capacity and 7.5 MW of battery storage, while the Goldman unit will hold the power purchase agreement. The project also includes about 6 MW of community solar capacity; the Port Authority says homes and businesses near the airport will be able to purchase solar power at a discounted rate.

Hong Kong to phase out gasoline-powered cars: Hong Kong intends to gradually remove all fossil fuel-powered cars from itrs roadways over the next one to two decades. The government will also push a shift to electric power for all commercial and public transportation. Hong Kong is already providing about $250 million to older apartment complexes to upgrade their parking ramps and lots to include EV charging stations.Within three years, about one-fourth of all parking spaces in Hong Kong should offer EV charging, officials estimate.

South Korea embracing hydrogen and solar: South Korea is looking to position itself as a cleantech leader, and has committed to building three new cities that are entirely powered by hydrogen by 2022. The cities will use hydrogen to power all transportation, including buses and personal cars, and will also use hydrogen as the fuel for heating, cooling and electricity. Separately, the government is massively expanding the reach of solar panels in the capital city of Seoul. By 2022, every public building, as well as 1 million homes in the city, will be powered by solar energy. South Korea has a target of getting 35% of all its electricity from renewables by 2040.

Upcoming Event
To learn more about how major investors are factoring climate change into their investments and are decarbonizing their portfolios, please register for the Managing Climate Risks Forum on December 10th in San Francisco.

During this timely event, institutional investors, private banks, asset managers, policy makers and climate experts will provide insight into how leading investors are assessing climate-related risks, increasing shareholder engagement and capitalizing on opportunities in the transition to a more sustainable economy.

Hear from SFERS, Sierra Club Foundation, Cambridge Associates, AIMCo, Meketa Investment Group, California State Treasurer’s Office, Mercer, Abbot Downing, Impax Asset Management, MSCI, SASB and others.  Register here

 

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