Asset manager BlackRock, Inc. (BLK) said it has entered into a Climate Finance Partnership or CFP to accelerate the flow of capital into climate-related investments in emerging markets, with a priority focus on Africa.
The other parties to the CFP are France, Germany, and the Hewlett and Grantham foundations.
The company said CFP investments will be targeted toward select countries in South East Asia, Latin America, and Africa. Investments in Africa will account for at least 25% of the total capital invested.
The vehicle's focus will include grid connected and/or distributed generation renewable energy power; energy efficiency in residential, commercial and/or industrial sectors; energy storage solutions; and ultra-low emission or electrified transportation and mobility services.
French Development Agency or AFD Group, through its private-sector subsidiary PROPARCO, is partnering with BlackRock, to accelerate the mobilization of private-sector financing towards climate.
The vehicle will feature a first-loss tranche of at least $100 million in catalytic capital, anchored by government and foundation partners, that BlackRock will use to mobilize a goal of at least $400 million in institutional capital commitments. This would result in a minimum size of $500 million at first close and CFP parties share a collective goal of further scaling the vehicle going forward.
The Governments of France, through AFD, and Germany, with the KfW acting as a trustee, intend to contribute $30 million each to the partnership.
The William and Flora Hewlett Foundation and the Jeremy and Hannelore Grantham Environmental Trust have committed $10 million and $7.5 million respectively. CFP parties have committed to help raise the additional capital required to reach the $100 million in catalytic capital.
State Secretary Jochen Flasbarth from the German Ministry for the Environment,Nature Conservation and Nuclear Safety, said, "We are fully aware that a worldwide rise in ambition is required to respond to the climate crisis. Developing countries will need our support to increase their climate action. For that, both public and private funds will be essential."
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