Climate Finance News - December 25
IFC issues green bond for biodiversity; EIB funds Electrolux to develop energy efficient appliances, electric bus fleet in Spain; Germany supports new lithium project;
IIGCC 2024 Annual Report: Advancing Net Zero and Climate Resilience
The UK-based Institutional Investors Group on Climate Change (IIGCC) released its 2024 annual report, highlighting its work on net zero, nature, adaptation and resilience, and emerging markets and developing economies. Key initiatives included the launch of NZIF 2.0, engagement with over 270 companies, and the assumption of the Secretariat role for the Financial Sector Deforestation Action initiative. The IIGCC also published numerous resources and guidance documents, and actively engaged in policy discussions at the EU, UK, and global levels.
ESMA Clarifies ESG Guidelines for Funds
The European Securities and Markets Authority (ESMA) published three sets of Q&As to clarify guidelines on funds using ESG or sustainability-related terms in their names. The Q&As clarify how investments under the European Green Bonds Regulation are treated regarding investment restrictions, the meaning of "meaningfully investing in sustainable investments" and the application of exclusions related to controversial weapons.
Brazil Funds Climate Change Mitigation and Disaster Recovery
Brazil has approved R$ 6.5 billion for infrastructure recovery in areas affected by extreme weather events and R$ 233.2 million for addressing the impact of fires and drought in the Amazon and Pantanal. The funds will be used for various initiatives, including improving hydrological alert systems, strengthening environmental monitoring, and restoring river navigability. Specific ministries and institutions such as the Ministry of Cities, Ibama, and ICMBio will oversee the implementation of these projects.
EIB finances €69 million for Valencia’s electric bus fleet expansion
The European Investment Bank (EIB) provided a €69 million loan to Valencia’s Empresa Municipal de Transportes (EMT) to finance the expansion of EMT Valencia’s zero-emissions bus fleet. The project involves purchasing 145 electric buses and installing charging infrastructure, improving public transport sustainability in Valencia and nearby municipalities. This aligns with the EIB Group’s strategic priority of becoming the Climate Bank and promoting sustainable transport.
EIB funds Ukraine's energy grid resilience against attacks
The European Investment Bank (EIB) has provided €86 million to Ukrenergo, Ukraine’s national electricity transmission system operator, to build protective anti-drone shelters for critical power substations. This funding, backed by EU guarantees and part of the Ukraine Energy Rescue Plan, aims to strengthen the resilience of Ukraine’s energy system against ongoing military attacks by Russia.
Tata Steel's Port Talbot Decarbonisation: £30m Transition Funding
The UK Government has doubled funding to £30 million for the Employment and Skills and Supply Chain Transition Funds to support businesses and individuals affected by Tata Steel's decarbonisation programme at its Port Talbot site. The eligibility criteria for the Supply Chain Fund has been widened, and grant sizes increased, to support more businesses and workers. This funding is part of the UK Government’s £80 million commitment to support the transition.
EIB lends Electrolux €200M for greener appliances
The European Investment Bank (EIB) has lent €200 million to Sweden-based Electrolux Group to develop energy-efficient household appliances. The project involves research, development, and innovation (RDI) activities in Italy, Sweden, Germany, Poland, and Romania, aiming to reduce energy consumption and resource use in household goods by 2026. This loan is supported by the InvestEU program and aligns with Electrolux Group's science-based climate targets.
Peruvian App Combats Food Waste, Reducing CO2 Emissions
Peru-based start-up Cirkula, supported by CATAL1.5°T, an initiative funded by the Green Climate Fund and implemented by GIZ, has developed an app to reduce food waste. The app has rescued 45,000kg of food, reduced 100,000kg of CO2 emissions, and saved USD 300,000. Cirkula aims to reduce 4 million kg of food waste and 9 million kg of CO2 emissions in the next 5 years.
Germany approves €4B for LNG terminal operations
Germany has approved a €4.06 billion state aid measure to support the operation of four floating storage and regassification units (FSRUs) for importing Liquefied Natural Gas (LNG) by Deutsche Energy Terminal (DET). This measure, aligned with the REPowerEU Plan, aims to diversify energy supplies and ensure gas security, addressing disruptions caused by Russia's invasion of Ukraine. The aid covers DET's operational losses until the end of the FSRUs' charter period, with a potential total contribution of €4.96 billion.
Connexus Energy Awarded $170 Million for Renewable Energy
US-based Connexus Energy received a nearly $170 million Empowering Rural America (New ERA) grant from the USDA to expand its renewable energy portfolio. This will support Connexus’s efforts to decarbonize its resources, including 282 MW of wind, solar, and hydro power, and 20 MW of battery storage. The New ERA program aims to transition rural Americans to clean energy, improving health outcomes and providing renewable energy at reasonable costs.
Savannah Resources Advances Europe's Largest Lithium Project
Portugal-based Savannah Resources Plc, with AMG Critical Materials as a strategic partner, secured a loan guarantee of up to US$270 million from Germany for its Barroso Lithium Project, Europe's largest spodumene lithium deposit. The project aims to produce lithium for approximately half a million vehicle battery packs annually, contributing to Europe's Critical Raw Material Act goal. Savannah also received significant support from Portuguese investors and the Portuguese state, including a mining lease.
Verde Clean Fuels Secures $50 Million for Clean Energy
US-based Verde Clean Fuels, Inc. announced a $50 million equity investment from Cottonmouth Ventures, LLC, a subsidiary of Diamondback Energy, Inc. The investment will be used to develop natural gas-to-gasoline production plants in the Permian Basin using Verde’s patented STG+® process. This increases Cottonmouth’s total investment in Verde to $70 million, making it the second largest shareholder.
USDA Announces $4.37 Billion for Rural Clean Energy
The US Department of Agriculture (USDA) announced over $4.37 billion in clean energy investments through the Empowering Rural America (New ERA) Program. Rural electric cooperatives will use the funding to create thousands of jobs, lower electricity costs, and reduce climate pollution. The initiative is part of President Biden’s Inflation Reduction Act.
GAIN Awards Vouchers for Advanced Nuclear Technologies
The US-based Gateway for Accelerated Innovation in Nuclear (GAIN) awarded four vouchers to support the development of advanced nuclear technologies. Curio Solutions, Deep Fission, Inc., Kairos Power LLC, and NuCube Energy will collaborate with DOE national laboratories to advance nuclear fuel recycling, microreactor design, salt coolant monitoring, and carbon dioxide conversion technologies. GAIN vouchers provide access to national laboratory resources, with awardees responsible for a minimum 20 percent cost share.
Virginia Establishes $127M Disaster Fund using RGGI Funds
The Commonwealth of Virginia has proposed a $127 million investment to establish the Disaster Assistance Fund, leveraging $102 million from the Regional Greenhouse Gas Initiative (RGGI) 2023 Final Payment and Interest and $25 million from the General Fund. This fund will support recovery efforts from Hurricane Helene, addressing unmet needs not covered by federal assistance or private donations. The initiative will help Virginia meet federal funding match requirements for disaster relief.
IFC Issues SEK 2 Billion Green Bond for Biodiversity
The International Finance Corporation (IFC), a member of the World Bank Group, issued a 2 billion Swedish krona green bond to promote biodiversity projects in emerging markets. SEB was the sole manager of the 5-year transaction. The bond proceeds will support initiatives like BTG Pactual Timberland Investment Group’s Latin American reforestation and BBVA Colombia’s biodiversity bond for regenerating Colombian forests. Swedish state pension fund AP7 invested in the bond.
California's Plan to Reduce Electricity Rates and Boost Clean Energy
The Public Advocates Office in California recommends strategies to reduce electricity rates, including reducing operating and capital expenses, phasing out non-cost-effective programs, modernizing subsidies and rate structures, and employing alternative financing methods. They estimate initial rate reductions of 4–5%, with greater savings over time. Specific cost-saving measures include securitizing undergrounding projects (potentially saving $310 million annually by 2026) and reforming Net Energy Metering (NEM) subsidies (reducing cost shift by $1.2 billion in 2024).
America the Beautiful Challenge Awards $122.5 Million for Conservation
The National Fish and Wildlife Foundation (NFWF), in partnership with several US federal agencies and private organizations, announced $122.5 million in grants through the America’s Ecosystem Restoration Initiative: America the Beautiful Challenge (ATBC). These grants will support 61 landscape-scale conservation projects across the US, generating at least $8.7 million in matching contributions. The projects focus on habitat conservation, restoration, community resilience, and access to nature, with an emphasis on supporting Tribal and Native Nation projects and incorporating Indigenous Knowledge.
