BlackRock, France, Germany Govts. Seek $500M Investment For Their Joint Climate Fund

The Climate Finance Partnership (CFP) organization is seeking to raise $500 million as initial funding for its environment protection fund.

BlackRock Takes Charge

The CFP was announced at the One Planet Summit in September 2018.

Leading partner BlackRock Inc. BLK said the vehicle will feature a first-loss tranche of at least $100 million in catalytic capital, anchored by government and foundation partners, which BlackRock will use to mobilize a goal of at least $400 million in institutional capital commitments.

The governments of France and Germany, both of which are partners in the CFP, will contribute $30 million each.

The other two partners, the Hewlett Foundation of the HP Inc. HPQ and the Hewlett Packard Enterprise Co HPE founder William and his wife, Flora Hewlett, and the Jeremy and Hannelore Grantham Environmental Trust will invest $10 million and $7.5 million respectively.

Funds To Be Invested In Developing Countries

The funds will be invested in select countries in South East Asia, Latin America, and Africa, CFP said. At least 25% of the total capital is to go towards Africa.

The organization will invest in climate infrastructure to promote renewable energy, energy storage solutions, and ultra-low emission or electric vehicles.

"Developing countries will need our support to increase their climate action. For that, both public and private funds will be essential," Jochen Flasbarth, State Secretary for the German Ministry for the Environment, Nature Conservation and Nuclear Safety said in the statement.

"By this, we are sending a strong signal of the importance of shifting financial flows towards a low carbon development."

Brian Deese, Global Head of Sustainable Investing at BlackRock, said that the company believes "creative collaboration is essential to mobilizing investment into climate infrastructure in emerging markets at scale," and provides its clients with an "opportunity to invest in the global low-carbon transition."

The partners are aiming to launch the fund by the third quarter this year, according to the statement.

Price Action

BlackRock's shares closed 1.12% lower at $529.14 on Tuesday.