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BlackRock, Temasek set to raise billions for decarbonization solutions

American investment management company, BlackRock Inc., and Singapore-headquartered investment company, Temasek have launched a decarbonization investment partnership to invest in companies that help cut carbon emissions and accelerate the transition to net-zero.

Through the latest partnership, 'Decarbonization Partners' the two companies will be investing in next-generation private companies that provide solutions and technologies which accelerate global efforts to achieve net-zero global economy by 2050. The two companies intend to commit a combined amount of US $600 million in initial capital to invest in multiple funds launched by the partnership.

"The world cannot meet its net-zero ambitions without transformational innovation. For decarbonization solutions and technologies to transform our economy, they need to be scaled," said Larry Fink, Chairman, and CEO of BlackRock.

"This partnership will help define climate solutions as a standalone asset class that is both essential to our collective mission and a historic investment opportunity created by the net-zero transition," Fink added.

Investment in decarbonization solutions

As per BlackRock and Temasek, the partnership will launch a series of late-stage venture capital and early growth private equity investment funds that will focus on advancing decarbonization solutions to accelerate global efforts to achieve a net-zero economy by 2050. In addition to the initial capital of US$600 million, funds will also raise third-party capital from investors who are committed to achieving a net-zero world while looking to secure long-term sustainable financial returns.

Decarbonization Partners has a fundraising target of US$1 billion for its first fund, including capital from Temasek and BlackRock.

"Bold, aggressive actions are needed to make the global net-zero ambition a reality. Decarbonization Partners represents one of several steps we are taking to follow through on our commitment to halve the emissions1 from our portfolio by 2030, and ultimately move to net zero emissions by 2050," said Dilhan Pillay, Chief Executive Officer of Temasek International.

"Through collective efforts with like-minded partners, we will be able to create sustainable value for all of our stakeholders over the long term, and investors will have the opportunity to help deliver innovative solutions at scale to address climate challenges."

Focus on early-stage growth companies

As per the plan, Decarbonization Partners funds will deploy private capital with a focus on early-stage growth companies targeting proven, next-generation renewable and mobility technology including emerging fuel sources, grid solutions, battery storage, and electric and autonomous vehicle technologies as well as in building and manufacturing sectors to drive decarbonization, resource efficiencies, and material and process innovation.

Recognizing that climate transition presents a significant opportunity for investment, through this partnership, BlackRock and Temasek will combine both the firms' expertise in private markets to invest in companies with proven technologies that will reduce and potentially eliminate carbon emissions. 

Author : Shraddha Kakade
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