Fundraising Update: KKR, Generate Each Top $1B for Cleantech Funds

At least two firms — Generate Capital and KKR — have recently raised 10-figure funds that they will now deploy into clean energy and other sustainable projects, with the money coming from a wide range of institutional, family office and high-net-worth investors. Is it a sign of a renaissance in interest for cleantech projects? Some industry observers are cautiously optimistic.

Meanwhile, oil and gas companies continue to slowly become a bit more green. BP released a plan to become net-zero by 2050, and to take other steps such as monitoring and reducing its methane emissions and increasing its investments into non-oil and gas related projects; the announcement garnered some positive headlines, though some critics say the plan is too little, too late and lacks any real strategy to get to net-zero.

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Other oil and gas companies have made less splashy investments into solar and other cleantech programs recently. This news roundup details those, plus other fundraising efforts from across the cleantech and sustainability sectors.

Generate Capital Breaks $1B Mark for Clean Energy: Generate Capital raised more than $1 billion from a range of institutional investors — a signal, observers say, of growing interest in low-carbon investments. The money came from investors including Sweden’s AP2, Queensland Investment Company, AustralianSuper and the UK’s Railways Pension

Generate says it will invest the money in clean energy projects across North America.

The firm also announced that Richard Kauffman, the chairman of the the New York State Energy Research and Development Authority (NYSERDA), is now chairman of the firm’s board of directors; Sunrun CEO Lynn Jurich has also joined the board.

San Francisco-based Generate raised about $200 million in 2017. The company increased its target significantly for this fundraising, “because we see insatiable demand for our money and our services,” CEO and cofounder Scott Jacobs tells the Wall Street Journal. “I think a growing awareness of the economic nature of the opportunity set, rather than the altruistic or policy-oriented nature of the discussion, has been helpful.”

Jacobs, SunEdison founder Jigar Shah, and others formed Generate in 2014. The firm has invested in more than 2,000 sustainable infrastructure projects since then, including wastewater treatment facilities, urban farms and residential community solar projects. The firm sometimes invests in projects that larger infrastructure investors like banks or private equity firms avoid because the projects are too small or too risky, or because they lack the expertise in such areas.

KKR Closes Global Impact Fund with $1.3 Billion: Private equity manager KKR reached a final close on its Global Impact Fund with $1.3 billion. The fund will invest in companies worldwide that look for commercial ways to solve environmental or social problems, particularly those tied to the UN’s Sustainable Development Goals. Investors include public pensions, family offices and high-net-worth investors; KKR itself put $130 million into the fund.

The main themes KKR expects the fund to invest in include mitigating and adapting to climate change, protecting clean water, responsible waste management, offering healthier and more sustainable products and services and more

KKR launched its “global impact” business line in 2018; the team now has 12 members. The firm’s ESG investments have totalled $5.5 billion over the past 10 years in areas like green energy, clean water and workforce development.

Total Pays $510M for 50% Stake in Indian Solar Portfolio: French energy giant Total paid more than $500 million for a 50% ownership stake in Adani Green Energy, the solar arm of Indian conglomerate Adani Group. Total expects double-digit returns on its investment in the company, which owns and operates solar projects with total capacity of more than 2GW in 11 Indian states. While Total, like most oil and gas majors, has been investing in green energy, it’s also not giving up on hydrocarbons: in October, it struck a separate deal with Adani to take a 37.5% stake in Adani Gas, a deal that includes LNG infrastructure and marketing natural gas in India and Bangladesh.

Chevron Backs Carbon-Capture Startup: Carbon Clean Solutions, a London-based startup that works on carbon capture and storage, raised $16 million from investors including Chevron Technology Ventures, Boston’s WAVE Equity Partners and Japanese industrial conglomerate Marubeni. Carbon Clean will use the capital to deliver its pipeline of projects and to help develop a “containerized solution” that it thinks will bring down the cost of carbon emissions capturing to $30 per ton by 2021. Carbon Clean’s biggest current project is in India, which it says captures carbon dioxide emissions for about $35 a ton.

Shell, Valent Invest in Biofuel Startup: Shell Ventures and Valent Low-Carbon Technologies have made an equity investment in Canadian biofuel startup FORGE Hydrocarbons. The money will help FORGE build a $23 million commercial-scale biofuel production plant in southwest Ontario. FORGE uses what it calls a lipid-to-hydrocarbon technology to create renewable diesel, jet fuel and naphtha from waste fats and oils. It’s Shell Ventures’ first investment in the firm; Valent is an existing investor, as is Lockheed Martin. Terms of the investment weren’t disclosed.

Breakthrough Energy Ventures Backs Lithium-Focused Startup: Breakthrough Energy Ventures, the firm led by Bill Gates and backed by Jack Ma, Jeff Bezos and others, led a funding round that raised $20 million for Lilac Solutions. The Oakland-based startup says it’s working to commercialize a more efficient way of extracting lithium for batteries, which should translate to less expensive batteries for electric vehicles and other applications. Other investors in this funding round included the Grantham Foundation, The Engine and Lowercarbon Capital.

Temasek Helps Solar Developer Sunseap Raise $100M+: Singapore-based solar developer Sunseap raised more than $100 million in the past month from investors including Singapore state investor Temasek. In late January, Temasek and impact-focused private equity firm ABC World Asia invested S$50 million, about $36 million, in the company. Two weeks later, Sunseap announced a S$100 million ($72 million) investment from Thai energy firm Banpu Group. The company says it’s now raised nearly $150 million in Series D fundraising and intends to use the money to expand across Singapore and Southeast Asia.

Standard Chartered Commits $75B toward SDGs: Standard Chartered says it will take significant steps to helping the world meet the UN’s SDGs. That includes providing $40 billion of project finance for sustainable infrastructure projects, and another $35 billion for project finance and other programs to support cleantech and renewable energy projects. The London-based bank says it will also reduce the carbon emissions of all its properties worldwide, targeting net-zero emissions through energy efficiency and renewable energy. The bank has also said it will, by 2030, stop financing companies that get more than 10% of their earnings from thermal coal.

Agriculture Data Firm Raises $75 Million: Semios, a Vancouver-based agtech firm that provides crop data and pest management tools via big data and machine learning, raised $75 million in a funding round led by Boston-based venture capital firm Morningside Group. Semios has now raised $115 million in external capital, money it says it will use for R&D and possible partnerships or acquisitions.

Singapore to Phase Out Fossil-Fuel Cars, Support EVs: The government of Singapore wants to “phase out internal combustion engine vehicles and have all vehicles run on cleaner energy by 2040,” Deputy Prime Minister Heng Swee Keat says. The nation-state has nearly 1 milion vehicles on its roads, but only 47,000 of them are electric or hybrid. The government hopes to change that through efforts like increasing the number of charging points nationwide, from just 1,600 today to 28,000 by 2030. The government will also take steps to lower the upfront cost of buying an electric car by 11%, and revise the road tax code to make EV usage some 9% lower than using vehicles powered by internal combustion engines.

Container Farming Startup Raises $15 Million: Ospraie Ag Science, a venture capital firm with a focus on sustainable agriculture, led a $15 million Series B funding rfound for container farming startup Freight Farms. Spark Capital, an existing investor, also took part in the funding round. Boston-based Freight Farms, which builds growing systems within shipping containers, has now raised a total of $28 million. The firm recently signed a deal with food service provider Sodexo that will see Freight Farms’ container farms placed on some university campuses where Sodexo has operations.

ADB Preps $50M Fund Targeting SGDs in Asia-Pacific: The Asian Development Bank is raising $50 million for a fund that will invest in technology solutions aimed at addressing the UN’s sustainable development goals across the Asia-Pacific region. The fund, to be administered by the bank’s new ADB Ventures platform, will invest in early-stage start-ups focused on climate change and empowering women, in sectors including cleantech, finance, agriculture and health. Among the aims is to co-invest with private sector investors to mobilize private capital toward the SDGs. “Our vision is for ADB Ventures to become the region’s largest impact technology platform, crowding in more than $1 billion of risk capital to achieve the SDGs by 2030,” says ADB Director General for Private Sector Operations Mike Barrow.

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