Dive Brief:
- BlackRock announced Thursday it was approaching $1 billion in capital commitments for its Evergreen Infrastructure fund, which will invest in businesses playing a role in the clean energy transition in North America and Europe.
- The firm secured a chunk of the funding from its European Founding Partners program and expects 50%-60% of the final portfolio to be allocated to Western European businesses.The fund will also focus on transportation, digital infrastructure and the circular economy.
- The fund has already signed an agreement to acquire Lighthouse, a portfolio of solar and battery storage investments currently operating in six states. BlackRock said the portfolio’s operations are supported by the Inflation Reduction Act, which passed last year and included more than $369 billion in clean energy and climate incentives.
Dive Insight:
BlackRock first announced the open-ended infrastructure equity fund in June 2022. The company said that by focusing on long-term cash yields, the fund’s investments will deliver consistent returns both resilient to and linked to inflation.
“In today’s evolving energy landscape, companies are looking for capital that will partner with them as they adapt their businesses and navigate an accelerating long-term shift towards a lower-carbon economy,” Anne Valentine Andrews, BlackRock’s global head of infrastructure and real estate, said in the release.
The latest round of funding includes investments from Italy’s largest bank, Intesa Sanpaolo S.p.A, and a pension fund for Italian engineers and architects, Inarcassa. Flavio Gianetti, executive director of M&A and group shareholdings for Intesa Sanpaolo, said the project emphasizes the need to develop new infrastructure focused on sustainability and the energy transition.
For Inarcassa, the investment was about “entering a network of institutional investors who are active in supporting the transformation of an evolving, low-carbon economy, while promoting the well-being of communities and the environment,” according to its president, Guisseppe Santoro.
The fund’s open-ended structure enables it to provide businesses financial support during their own clean energy transitions. BlackRock said the fund will work with portfolio companies to help implement decarbonization activities and actively track, assess and report on progress.
While the company plans on an eventual split North American-European portfolio, it’s notable that Evergreen Infrastructure’s first portfolio is focused on capitalizing off President Joe Biden’s landmark climate law. The bill created tax incentives for investments in renewable energy projects, including an extended credit for qualified investments in solar and battery storage.
