BlackRock Raises $250 Million for Emerging Market Climate Infrastructure Fund

Image source: BlackRock

BlackRock Inc (NYSE: BLK ), the world’s largest money management firm, announced Thursday it has raised over $250 million for its climate finance fund to help emerging markets in Asia, Africa and Latin America accelerate their transition to low-carbon, climate-resilient economies. 

The funding, which was committed by a group of ten investors to BlackRock’s Climate Finance Partnership (CFP), will go towards green energy infrastructure, including renewable power generation, energy storage solutions and electrified transportation services, according to a press release. 

Investors included the governments of Germany, France and Japan, philanthropic organizations and global institutional investors. 

BlackRock said the CFP seeks to raise at least $500 million by next summer and is “delighted to have secured half of its target at first close.”

According to The Financial Times, the fund plans to invest in projects over a three- to four-year period, with the expectation of “low double-digit returns” for investors over the subsequent seven years. 

“Conceived at the One Planet Summit in September 2018 under the leadership of French President Emmanuel Macron, CFP showcases the potential for the public, philanthropic and private sectors to work together to mobilize significant investment into climate infrastructure that can deliver positive environmental and social impact and allow for attractive risk-adjusted returns,” the asset manager said in its press release.

BlackRock went on to say that "significant capital" is required for climate infrastructure in emerging markets to help reduce carbon emissions and that the transition toward a net-zero economy by 2050 “can only be achieved with more institutional capital flows into less developed regions, where there are acute challenges from population growth, rising energy demand and climate disruption.”

In a statement, Remy Rioux, chief executive officer of the French Development Agency, called the CFP an “ambitious partnership” that “will help redirect financial flows toward sustainable development investments across the emerging world.”

Jochen Flasbarth, state secretary of the German Ministry for the Environment, Nature Conservation and Nuclear Safety, said, “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.”

“The Paris Agreement requires nothing less from us than the climate-friendly transformation of the financial sector,” Flasbarth added.

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Source: Equities News