The Brief: New climate narrative: Creating jobs, lowering prices and beating China

Greetings Agents of Impact! Don’t miss this week’s calls: 

🔌 Plugged In: Impact Investing in 2025. Include Ventures’ Taj Eldridge will join ImpactAlpha contributing editor Sherrell Dorsey to talk green jobs, making climate cool, and impact investing in the Trump era. Join this lively session, Tuesday Dec. 10, at 10am PT / 1pm ET / 6pm London. Sign up now.

📞 Agents of Impact Call: Napoleon Wallace and the Reconstruction of Black wealth. We’ll show ImpactAlpha’s 20-minute documentary video, which charts Wallace’s quest to build a network of organizations to foster Black wealth building and multi-racial prosperity – while living with the challenges of advanced ALS. Wallace, along with Brittany Bennett Weston and other Agents of Impact, will join the discussion after this exclusive screening, Thursday, Dec. 12, at 10am PT / 1pm ET / 6pm London. RSVP today. 

In today’s Brief:

• The climate tech crowd changes its tune for Trump
• Impact notes for African microfinance
• Lab-grown chocolate
• Impact investing Down Under

Featured: Energy Transition

Energy Department’s new climate narrative: Creating jobs, lowering prices and beating China. Energy transition, meet presidential transition. Six weeks before President-elect Donald Trump moves back into the White House with vows to upend climate action, nearly 2,000 founders and investors pushing climate solutions gathered in Washington, DC, for the US Department of Energy’s “Deploy” conference. For a climate tech conference, there was little talk of, well, climate change. The new talking points: Creating jobs, cutting energy prices, and strengthening America’s hand in the competition with China. At times, it seemed the speakers were making their case to the Trump transition advisors rumored to be in attendance. DOE employees are scrambling to get funds out the door, even as they plot their career moves. Trump has vowed to “rescind all unspent funds” from President Biden’s climate law, the Inflation Reduction Act. In the crosshairs is the DOE’s Loan Programs Office, under the leadership of climate tech veteran Jigar Shah, which offers loans and guarantees to provide a “bridge to bankability” for innovative climate tech companies. The IRA boosted the LPO’s lending authority from $40 billion to $400 billion. “We need Jigar to keep shoveling money out the door right up until January 20,” said White House climate advisor John Podesta.

• Scaling partner. As the conference was underway, Vivek Ramaswamy, who with Elon Musk has been tasked by Trump to slash government costs, threatened to claw back a $6 billion conditional loan LPO extended to EV maker Rivian in November to build a factory in Georgia (Musk’s Tesla received a pivotal $465 million loan from the LPO in 2010 to build its first factory). So far, LPO says it has finalized just 14 loans totalling $13.5 billion. Applicants go through a lengthy due diligence process and the loans are conditioned on meeting financial or technical milestones. “Building a car company, building an energy company – these are businesses that take a tremendous amount of capital,” Rivian’s RJ Scaringe said in a conversation with Shah. “The role of the Department of Energy is the scaling partner.” Such loans “allow you to derisk to the next stage, when the private capital can come in and help you deploy,” said Jennifer Holmgren of carbon recycling company LanzaTech.
  
• Crossover appeal. The two-day conference was light on solar and wind energy but featured projects with bipartisan appeal, such as nuclear power, geothermal energy, green hydrogen, grid resilience and critical minerals. Founders largely sidestepped their companies’ climate impact. An exception was James Calaway of Ioneer USA, which is developing a lithium carbonate mine in Nevada. He drew applause when he said, “I’m doing this to save the planet for my grandchildren.” Heather Reams of Citizens for Responsible Energy Solutions, a right-of-center nonprofit trade group, advised cleantech founders to rethink their messaging in a way that will resonate with the new regime. “You’re not changing your business, but you’re pivoting the words that you use in those meetings.”
  
• Staying power. Administration officials rubbed like a talisman the oft-cited statistic that nearly 70% of the new clean energy jobs created under the IRA are located in Republican-led districts. “Clean energy has become bipartisan in the United States,” Podesta said. “The economics of the clean energy transition have simply taken over.” Energy Secretary Jennifer Granholm declared, “It would be political malpractice to undo the incentives that are causing all of this economic activity in those red states.” In the face of uncertainty, climate tech investors stressed sticking to investments with good underlying fundamentals. “It’s going to be a brand new world,” said Rob Day of Spring Lane Capital, a sustainable infrastructure funder. “It’s going to be hard to predict.”
  
• Keep reading, “Energy Department’s new climate narrative: Creating jobs, lowering prices and beating China,” by Amy Cortese on ImpactAlpha. 

Dealflow: Financial Inclusion

BRAC raises $32 million in impact notes redux. A $40 million debt raise in 2022 helped Bangladesh-based microfinance institution BRAC International secure the capital it needed to help its in-country operations in Asia and Africa recover from the Covid pandemic. The impact notes were an efficient way to fundraise for an organization that operates in countries where many investors are disinclined to go. “It’s not just efficient to raise all at once; having a reliable source of funding across the group was important to the organization,” said Courageous Capital’s Laurie Spengler, a BRAC advisor who helped design the note program. BRAC has now secured $32 million in its second impact note series, with investors Global Partnerships and French development finance institution Proparco reupping their commitments, and Belgian DFI BIO and family office Ceniarth participating for the first time. Hanan Fariyel and Abhijit Gupta teed up the series for BRAC.

• Local capital supplement. Committed capital from the notes goes to BRAC International and is then distributed to local country offices as needed. Each country office is meant to first secure as much local currency funding as possible for their lending operations. BRAC International is likely to issue more such notes in the future. “The aspiration when setting up the notes program was to build something that could be a reliable, regular source of debt to support BRAC’s global footprint,” said Spengler.
  
• Investing in women. BRAC, one of the largest NGOs in the world, runs microfinance institutions in eight countries. Its local operations have reached more than 870,000 borrowers, nearly all of whom are women. Funding from the second impact note series will support BRAC’s operations in Tanzania, Uganda, Liberia and Sierra Leone (see, “How Liberia and Sierra Leone rebounded after the Ebola shutdown“). “Africa has the highest share of female enterprises in the world, yet women receive only a fraction of the capital needed to grow their businesses,” said BRAC International’s Bridget Dougherty. “We must continue to mobilize resources to reach the millions of women who are still left behind in accessing responsible financial services.”
  
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Supply Change leads Celleste Bio’s $4.5 million round to make lab-grown cocoa ingredients. Chocolate makers are scrambling to secure cocoa supplies amid threats from unpredictable weather, deforestation and aging cacao trees (see, “How climate change is making your groceries more expensive”). “The industry needs solutions and it needs them fast,” said Shayna Harris of Supply Change Capital, which led Celleste Bio’s seed financing round. The funding will support production of Celleste Bio’s lab-grown cocoa powder. Celleste Bio’s cocoa ingredients have “the same taste and texture as tree-grown cocoa,” Harris told ImpactAlpha, and can help fulfill demand for cocoa in an environmentally responsible way. The Israeli startup produces cocoa in controlled bioreactors, which extract cells from raw cacao beans to make cocoa butter and powder. Harris says Celleste Bio can produce the ingredients to be cost competitive with conventionally-grown cocoa.

• Lab-grown chocolate. The seed capital “provides us with the financial and strategic support we need to accelerate product, scalability and commercial readiness,” said Celleste Bio’s Beressi Golomb. Cell-cultured food, including lab-grown meat and coffee, have struggled to be cost-competive and to navigate regulations to get to market. Celleste Bio’s investors are optimistic about the company’s commercial viability. Its round was led by the corporate venture arm of snack food giant Mondelez International. “As one of the world’s largest chocolate producers, we are acutely aware of the supply chain challenges we need to overcome to produce our iconic chocolate brands,” said Richie Gray of Mondelez’s SnackFutures Ventures. Consensus Business Group, The Trendlines Group, Barrel Ventures and Regba Agriculture also joined the round.
  
• Keep digging.

Dealflow overflow. Investment news crossing our desks:

• Apollo will acquire a 50% stake in a portfolio of solar and battery assets from TotalEnergies. The assets’ collective energy capacity is about two gigawatts. (Apollo)
  
• The European Investment Bank made its largest commitment to an African fund, investing $80 million in private equity firm Pembani Remgro’s second infrastructure fund for renewable energy, digital infrastructure and sustainable transportation. (EIB)

• Other African infrastructure news: The Development Bank of Southern Africa invested in Africa50’s Infrastructure Acceleration Fund, a catalytic fund to derisk and finance infrastructure projects in Africa. (DBSA)

Impact Voices: Impact in Oceania

What’s next for Australian Impact Investments after mobilizing $338 million for 75 deals. Australian Impact Investments, known as Aii, set out a decade ago to prove that the financial objectives of pension fund members, wholesale investors, foundations and family offices can coexist with social and environmental goals. “We have concrete evidence from investments across multiple asset classes, which show that it’s possible to invest for impact and generate risk-adjusted, market-rate returns,” writes Aii’s Kylie Charlton in a guest post. Aii’s clients placed nearly $20 million into Infradebt’s Ethical Investment Fund, which supports renewable energy and social infrastructure projects. The fund has returned 6.4% since inception, with a one-year return through October 2024 of 8.2%. Separately, Aii helped facilitate a $4.8 million loan to launch Ngutu College in Adelaide, which aims to enroll up to 50% First Nations students. The investment is delivering up to 10% per year to investors. Among the outcomes generated by the 75 deals coordinated by Aii: Quality education for children with autism, integration of Aboriginal knowledge in the national education curriculum, installation of solar on the Sydney International Convention Centre, and reuniting children in foster care with their families.

• Total impact portfolio. Aii is also helping investors execute an investing approach known as “total impact portfolio”  to incorporate impact and financial objectives across every asset class in an investment portfolio. Aii has worked with the Wyatt Trust, a 138-year-old charitable trust, and The Tony Foundation, to align their investment assets with their missions and purpose. Still, the $338 million raised by the 75 investments approved by Aii represents less than 0.1% of Australian wealth advisers’ portfolios.
  
• Greater mobilization. To boost Australia’s impact capital flows, says Charlton, investors need to see more choice across asset classes, more robust impact management practices, and evidence that impact investments can meet the return expectations. On the last point, Charlton says Aii’s portfolio delivers the evidence. “The next decade presents a critical opportunity to accelerate the growth of impact investing in Australia,” says Charlton. To seize this moment, “we must address the challenges head-on, innovate our approaches, and foster collaboration across the industry.”

• Keep reading, “What’s next for Australian Impact Investment after mobilizing $338 million for 75 deals,” by Aii’s Kylie Charlton on ImpactAlpha.

Agents of Impact: Follow the Talent

Mike Ilardi, previously with S&P Global, joins Dunya Analytics, a biodiversity and nature risk analytics firm, as chief commercial officer… Global Development Incubator seeks a South Asia-focused director… Finance in Motion is recruiting a renewables manager and investment officer… IDB Lab is looking for a senior specialist of ecosystem building and acceleration in Brazil. 

Goldman Sachs is leaving the Net-Zero Banking Alliance, the UN-backed group of global banks committed to aligning their lending and investments with net-zero transition goals by 2050…. 1863 Ventures, a Washington, DC-based nonprofit that invests in underrepresented founders, rebrands as a for-profit called New Majority Ventures.

ReFED will accept applications for its Catalytic Grant Fund, which provides grant capital to nonprofits and for-profits for early-stage food waste solutions, until Tuesday, Jan. 21. It is hosting an informational webinar Wednesday, Dec. 11… Criterion Institute’s month-long online convening on the future of gender-lens investing, is set to begin on Tuesday, Feb. 4. 

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Dec. 9, 2024