• Global sustainable lending volumes in February 2024 ($11.7bn) increased by more than 22% compared with February 2023. Significantly higher activity can be seen in the green loan market, which contributed to c.35% of total sustainable lending.
• Green lending volumes were dominated by the closing of a S$1.8bn green loan to Roma Central and Milano Central; a joint venture of Lendlease and Abu Dhabi Investment Authority, to refinance existing loans in relation to a mixed-use development in Singapore.
• Similarly, the increase in sustainability linked loan issuances in February was driven by real estate transactions, specifically in France and Saudi Arabia, which represented 65% of total sustainability linked lending in February ($3.5bn).

Figure 1: Global sustainable lending volumes, Jan-Feb 24’ vs. 23’ ($bn)

Blue Earth Capital closes its first sustainability private credit loan. Specialist global impact investment firm Blue Earth Capital has completed a $30m direct credit investment in Q Collection, a Singapore-headquartered vertically integrated apparel manufacturer with manufacturing operations in Bangladesh. Certain terms of the loan are tied to Q Collection’s performance in achieving predefined ESG targets linked to the Higg Index, a rating tool developed by the Sustainable Apparel Coalition that measures a company’s sustainability throughout the value chain.

Obvion mandates Green Storm 2024. Green Storm 2024 will be the latest securitisation of first-ranking Dutch mortgage loans originated by Obvion N.V., a residential mortgage provider in the Dutch market and a wholly owned subsidiary of Rabobank.

ColCap prices AUD1.4bn Triton 2024-1 Residential Mortgage Backed Security (RMBS) with AUD140m green tranche. ColCap, a Sydney-based leading prime residential mortgage lender, has successfully priced and settled its latest AUD1.4bn Triton 2024-1 RMBS. The green tranche was sized at AUD $140m, representing 10% of the transaction, to support carbon reduction building and renovation projects. This marks the platform’s second green issuance and the first publicly placed green tranche, with both senior tranches being preplaced in the previous deal.

Mirova holds second close at €195m for climate nature fund

Mirova, a subsidiary affiliate of Natixis Investment Managers dedicated to sustainable investing, has announced the second closing of the Climate Fund for Nature whose budget now exceeds €195m. Capgemini, Unibail-Rodamco-Westfield and the MANE Group have joined forces with the fund initiated by Kering and the L'Occitane Group to provide long-term financing for projects with a strong environmental and social impact that support the preservation and restoration of nature.
 

BlackRock acquires solar assets from Excelsior Energy Capital

Renewable energy infrastructure investor Excelsior Energy Capital announced the sale of 38 solar energy and solar plus storage projects from its Fund I portfolio to BlackRock’s Evergreen Infrastructure Partners Fund. The deal represents Excelsior’s first exit from its inaugural fund, Excelsior Renewable Energy Investment Fund I LP. The fund launched seven years ago, and attracted capital commitments above a $500m target. The fund has invested in solar, wind and battery storage projects across 10 US states.
 

EQT closes €3bn impact fund

Private equity investor EQT has held the final close of its EQT Future fund, at €3bn ($3.3bn) in total commitments, claiming it will link carried interest to its sustainability targets. EQT Future backs robust and downside-protected business models in two thematic areas: climate and nature, and health and wellbeing. The fund is Article 9 accredited and has innovated around ways to align sustainability with financial returns, linking carried interest to sustainability targets. The fund has a diversified investor base, including forward-thinking institutional and private wealth clients, notably family offices, with a greater share of commitments coming from the latter segment compared to the EQT Private Equity flagship funds.
 

BlackRock backs German low-carbon transition with $200m investment

Decentralised solutions energy provider Enviria announced that it’s entered into a definitive agreement on an equity investment of over USD 200 million from BlackRock, through its Global Renewable Power IV (GRP IV) fund. The additional capital will support plans to expand its solar plant range, tapping its development pipeline of approximately 2,000 commercial and industrial projects, totalling 2.3GW. The company raised €22.5m ($24.4m) in a series A funding round in June 2022, securing commitments from renewables developer Galileo Green Energy, Swiss venture capital fund Redalpine, impact investor Alter Equity and BNP Paribas Développement.
 

Impact Engine announces $85m close to second Private Equity Fund

Impact Engine, an independent, women and black, indigenous, and people of colour (BIPOC)-led and employee-owned asset manager that invests in venture capital and private equity strategies, announced today the final close of its $85m private equity fund, Impact Engine Private Equity Fund II. The fund brings the firm’s total assets under management to $240m. Impact Engine’s strategies seek to drive financial returns and social or environmental impact returns related to economic opportunity, environmental sustainability, and health equity. Impact Engine launched its private equity strategy in 2019 and since then has made commitments to 11 funds and 18 companies that improve health equity, environmental sustainability, or economic opportunity.
 

Mirova launches new €200m Private Equity Impact Fund

Sustainability-focused investment manager Mirova has launched Mirova Impact Life Essentials (MILE). MILE is a new private equity fund aimed at supporting companies contributing to the transition to a better society by addressing key sustainability challenges; ranging from climate change to growing inequality. Mirova has said that it aims to raise €200m ($218m) from institutional and individual investors for the new private equity strategy. According to the subsidiary of Natixis Investment Managers dedicated to sustainable finance, the strategy plans to back European companies tackling issues, such as climate change, ageing populations, tech advancements and inequalities, for a holistic and fair transition.
 

Climate fund managers to manage $1.3bn African blended finance energy fund

The Southern African Power Pool (SAPP) and investment advisers climate fund managers have launched a new $1.3bn target fund to build high-voltage transmission lines linking countries in the region. The Regional Transmission Infrastructure Financing Facility (RTIFF) starts with $20m in commitments from SAPP and is aiming for a first close of $500m in 2025, in a bid to overcome a key obstacle constraining growth in an evolving energy sector. Finance will be raised from public and private sector investors locally and internationally.
 

Munich Re’s MEAG raises Over $200m for Sustainable Forestry Fund

Munich Re Group’s asset manager MEAG announced that it has raised $207m in capital commitments at the first closing of its MEAG Sustainable Forestry Equity Fund. Launched in 2022, the Article 9 fund invests in ecologically sustainable forest management, in alignment with the definition of the EU Taxonomy, in addition to contributing to several of the United Nations Sustainable Development Goals (SDGs). The first investments of the fund are scheduled for the first half of 2024, and will focus on forested land in the USA, New Zealand and Australia, with 5% of asset volumes to be invested in new afforestation.
 

UK nature investment fund first close ‘soon’, says Lord Benyon

The UK government-backed Big Nature Impact Fund (BNIF) is expected to announce its first close from private investors “soon”, according to a senior minister. Speaking at the Environmental Finance Natural Capital Investment EMEA 2024 event, UK Climate, Environment and Energy minister Richard Benyon said the UK government has launched a number of initiatives to “address the investment pipeline” challenge facing natural capital investment, namely the BNIF. The BNIF was launched with a seed £30m ($38m) ‘junior’ investment from the UK Department for Environment, Food and Rural Affairs (DEFRA) – of which Benyon is a minister – which he said was intended to de-risk the investment required for natural capital projects.

Bloomberg survey reveals evolving ESG data as top challenge for European firms as CSRD looms

According to a new Bloomberg survey of approximately 200 financial market participants based in Europe, the continued increase in ESG data volumes is causing firms to grapple with the best way to manage this information; including coping with coverage and quality issues of reported company sustainability data and managing the increasing volume of information resulting from new regulatory ESG reporting requirements. The survey, taken by respondents from London, Stockholm, Geneva, Amsterdam, Frankfurt, Paris and Milan throughout 2023 posed questions about ESG data prioritisation, challenges and data management practices.
 

BlackRock highlights the forces shaping low-carbon transition investment

In a new report released by its insights and market commentary unit, BlackRock Investment Institute, BlackRock outlined a series of key developments that it expects to impact low-carbon transition-related investment opportunities and risks in 2024; including falling battery prices, upcoming elections, and rising physical climate risks.
 

SEC adopts rules to enhance and standardise climate-related disclosures for investors

The Securities and Exchange Commission (SEC) adopted rules to enhance and standardise climate-related disclosures by public companies and in public offerings. The final rules reflect the SEC’s efforts to respond to investors’ demand for more consistent, comparable and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.

Infrastructure Zero (30 March 2024, London)

The event aims to connect the policymakers, funders, industry leaders and innovators needed to maximise the impact of an estimated £40bn per year net zero related infrastructure investment in the 2020s.

What to expect:

• Government keynotes covering policy, strategy, and progress.
• Inspiring case studies of the biggest live and pending infrastructure projects.
• Opportunities to meet potential funders and partners.

Extra details of the event and link to register.

ESG Leaders’ Securitisation Summit 2024 (16 April 2024, London)

Transition towards more concrete ESG outcomes and better risk management is a key priority for regulators, with banks and investors subject to increasing prescription regarding the management of their exposure to climate and sustainability risks. This event examines the key themes and debates in this burgeoning sector, including the ramifications of the EU Green Bond Standard and the Sustainable Finance Disclosure Regulation (SFDR). The event also explores the role that securitisation can play in the emerging areas of transition finance and nature finance. Extra details of the event and link to register.
 

Sustainable Debt EMEA 2024 (16 April 2024, London)

In light of the increasing sophistication, diversity, and innovation across the spectrum of ESG-labelled bonds and loans, Environmental Finance is rebranding its long-established ‘ESG in Fixed Income Global Series’ to the ‘Sustainable Debt Global Series’. It will continue to provide in-depth analysis of major market developments for green, social, and sustainability-linked bonds and will expand coverage to include a dedicated sustainable loans stream. Extra details of the event and link to register.

For those looking to discuss any of the above further, please reach out to our authors:

Rahel Haque, Vice President, Climate and ESG Capital Markets

Fazl Ahmad, Analyst, Private Finance Structuring and ESG

Javier Patria, Analyst, Climate and ESG Capital Markets

*For any unfamiliar terms used within this article please refer to our Insights glossary.