By Simon Jessop and Susanna Twidale
LONDON (Reuters) – The world’s biggest asset manager BlackRock said it hopes to raise up to $7 billion for its fourth Global Renewable Power Fund as clients ramp up climate-friendly investments.
The fund, focused on projects in Organisation for Economic Co-operation and Development countries, could invest across wind and solar as well as other clean technologies such as batteries and grid infrastructure.
Demand from institutional investors to back such projects has increased in recent years as more seek to align their portfolios with the transition to a low-carbon economy, BlackRock’s Global Head of Climate Infrastructure David Giordano told Reuters.
The move has also been fuelled by a rapidly changing policy backdrop, with the United States and European Union both introducing major financial backing for clean energy to help cut carbon emissions in the fight against global warming.
“You have folks now that are really trying to focus their portfolio construction around the different sub-sectors in infrastructure,” Giordano said, citing increasing demand from pension schemes attracted to assets that match long-term liabilities.
The demand comes despite some U.S. Republicans pushing back against climate-driven constraints on fossil fuel companies, he said.
“I would say that the commitment of institutional investors to invest in the infrastructure of today and the infrastructure of the future is actually quite strong,” Giordano said.
As a result, the company said it is targeting between $5 billion and $7 billion for its fourth fund, after $4.8 billion was raised for its predecessor, which closed in April 2021.
To reach net-zero emissions by 2050, the International Energy Agency has said annual clean energy investment will need to more than triple to $4 trillion by the end of the decade.
Among the investments made by the third fund was one in high-power charging network IONITY, which raised 700 million euros in November. It also backed the Waratah Super Battery in Australia, which will be the world’s largest grid-scale battery.
Roughly a third of the latest fund would likely be invested in each major region – Europe, the Americas and Asia – although there are no set targets.
Depending on the amount raised, the fund could make around 18-22 investments across a mixture of early stage and developed projects, Giordano said, and could also consider co-investments.
(Reporting By Simon Jessop and Susanna Twidale; Editing by Elaine Hardcastle)