BlackRock has secured more than US$250 million for a finance vehicle that will invest in renewables and energy storage projects in countries across Asia, Latin America and Africa.
The asset manager’s Climate Finance Partnership (CFP) will focus on areas such as grid-connected and/or distributed clean energy plants, energy efficiency, transmission or energy storage solutions and electrified transport.
Financial support has been provided by the governments of France, Germany and Japan, as well as the Grantham Environmental Trust and the Quadrivium Foundation. A broader institutional capital raise will include commitments from Dai-ichi Life Insurance, Standard Chartered and MUFG Bank.
“We are supporting this partnership because we believe that combining the strengths of the public and private sectors is necessary in order to align finance flows with low-carbon and climate-resilient development,” said Jochen Flasbarth, state secretary at the German environment ministry.
Unveiled early last year at the World Economic Forum, CFP is aiming to raise a total of US$500 million for climate-related investments in emerging markets.
BlackRock said that with energy demand in emerging markets poised to double by 2050, there is significant capital required for climate infrastructure, such as renewables generation, in these regions to help reduce carbon emissions.
In BloombergNEF’s most recent Climatescope study – which encompasses 108 developing countries and 29 developed nations – the research organisation said foreign direct investment in renewables in emerging markets set a new record at US$32 billion in 2019, up from a previous high of US$24 billion the year before.
Having fully acquired US commercial and industrial PV developer Distributed Solar Development last year, BlackRock has since raised US$4.8 billion from institutional investors to fund renewable power generation projects in Europe, Asia and the Americas.