The Brief

The Brief: Searching for sustainable climate momentum in 2026

ImpactAlpha · December 18, 2025

Greetings Agents of Impact!

In today’s Brief:

Searching for sustainable climate momentum in 2026
Investing in South Africa’s water-scarce communities
Innovative Finance Initiative’s academy for impact practitioners

Featured: Looking Ahead to 2026

After a bruising year, climate investors look for signals of sustainable momentum. The cleantech carnage of canceled projects, solar bankruptcies and corporate write-downs is piling up amid gale-force policy headwinds. Nonprofit E2 estimates that at least $30 billion in investments have been lost since the Trump administration came into office in January. But survivors in clean energy, electric vehicles and other climate tech sectors are regrouping, buoyed by falling costs, investor interest and the surprisingly durable momentum of the clean energy transition. On Wednesday, the US District Court of Appeals breathed new life into the $20 billion Greenhouse Gas Reduction Fund, a legacy of the Biden-era Inflation Reduction Act that sought to stand up a network of green lenders that could reach deep into underserved communities. The funds have been frozen in Citibank accounts and tied up in the legal system since the Trump administration tried to cancel the program. The court will reconsider the case at a hearing in February. “Everyone deserves access to financing for clean energy projects that create good jobs, reduce pollution, and lower energy bills,” said Beth Bafford of Climate United, which had been selected to receive the largest chunk of GGRF funding.

Project pipelines. Green lenders, community developers and clean energy financiers are combing through their pipelines of projects to identify those that can move forward without federal incentives. Helping out are a slate of new funds with catalytic or flexible capital that could stand in for some of the government support. After months of closed door discussions, ImpactAssets Capital Partners kicked off Energy Catalyst Fund I late this year with $50 million from MacArthur Foundation and five family offices. The fund will make low-interest loans to advance green projects in low-income communities orphaned by the federal funding freeze. The Deployment Grant Fund, launched in July by The Clean Fight, Builders Vision and Breakthrough Energy Ventures, made its first grants, to geothermal startup Bedrock Energy and Kelvin, which is demonstrating the cost-effectiveness of electrifying an affordable housing complex in Brooklyn, NY. The All Aboard Coalition, a group of top-tier climate venture capital firms organized by TED curator Chris Anderson, hopes to clinch a $300 million fund by January and begin making its first investments.
Contrarian bets. The withdrawal of federal funding and incentives had the counterintuitive effect of increasing private investors’ interest in climate investments. “Times like these in history, for us, have actually presented the very best times to be investing,” said Colin le Duc, a founding partner of Generation Investment Management, the $30 billion sustainable asset manager whose other co-founders include Al Gore and David Blood. Billionaire investor Tom Steyer, who has taken a leave from Galvanize Climate Solutions to run for governor of California, said the withdrawal of government funding represented a buying opportunity. “If you’re sitting there with cash, it’s an unequivocally good thing, because prices are going to be lower, there’s going to be less competition, and you’re going to get better returns,” he told ImpactAlpha. Chris Creed, who joined Galvanize from the Energy Department’s Loan Programs Office, sees an opportunity in the administration’s focus on nuclear energy and geothermal, along with oil and gas. “That means my old pipeline of all of the other technologies in our taxonomy are not priorities, and they become investable options for private investors like us.”
Rise of the rest. If US climate investors are swimming against the tide, the rest of the world is riding it. At the COP30 climate summit in Brazil in November, more than 80 countries, including most of Europe, backed a roadmap for the phaseout of fossil fuels. China is nonetheless supplying its low-cost solar modules, EVs and batteries to eager buyers in Africa, Latin America and Europe. The Chinese EV maker BYD surpassed Tesla to become the world’s largest EV manufacturer. India is seeking to halve its greenhouse gas emissions and increase its renewable energy production to 500 gigawatts by 2030, and looking to create green jobs as it decarbonizes. “That should be our focus – growth in jobs with clean technology,” said India’s G20 representative, Amitabh Kant. In Latin America, investors and innovators are capitalizing on reforestation, regenerative farming, and bio-based alternatives to harmful products. “If you’re in the fashion business, you need to be in Paris or in Milan,” said Eduardo Mufarej of Just Climate, which raised $375 million for its natural capital strategy in November. “If you’re in the climate business, you need to be in Latam.”
Keep reading, “After a bruising year, climate investors look for signals of sustainable momentum,” by Amy Cortese. Catch up on all of our 2026 lookaheads.

Dealflow: Sustainable Infrastructure

Climate Fund Managers invests $86 million for water access in South Africa. South Africa’s northern Limpopo province, near the border with Botswana, is one of the most rural, poorest and climate-vulnerable regions of the country. Plenty of money flows through – the mineral-rich area is a major hub for mining operations – but local communities have been left behind on basic services and infrastructure. Netherlands-based Climate Fund Managers has committed $86 million in mezzanine debt to the Olifants Management Model Programme, a public-private initiative focused on expanding water infrastructure to both communities and commercial and industrial users in the Bushveld Igneous Complex, one of the world’s richest deposits of platinum, iron, titanium and other minerals. The capital will finance the first two phases of OMMP’s six-stage water pipeline project in the region, as well as renewable energy installations to power the new infrastructure. The completed infrastructure is expected to deliver potable water to nearly 400,000 residents in the area, or 6% of the population, as well as industrial and mining companies.

Business risk. A case study by one of the region’s mining operators, Anglo American Platinum, noted that the lack of reliable water services in the area “has given rise to social unrest and asset destruction,” by local communities against mining infrastructure and operations. “This investment demonstrates how blended finance can accelerate the delivery of essential infrastructure where it is most needed,” Climate Fund Managers’ Darron Johnson said of the deal. Climate Fund Managers was formed a decade ago by Dutch development bank FMO and South Africa-based Sanlam InfraWorks. It manages nearly $3 billion in three climate-focused blended finance funds and nearly $3 billion in assets throughout Africa, Asia and Latin America (for background, see “How commercial investors are streamlining blended fund structures”). Climate Fund Managers made the investment in OMMP through its second fund, a $1 billion facility that closed in October with catalytic capital from the European Commission and the Dutch Fund for Climate and Development.
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Dealflow overflow. Investment news crossing our desks:

Singapore’s Quantified Energy, a software company for solar asset monitoring, raised $6 million for its Series A equity round. The Asian Development Bank Ventures and Beacon Venture Capital participated. (e27)

India-based Aurassure raised 250 million rupees ($2.7 million) from investors including Rainmatter Capital Fund and Unicorn India Ventures to provide real-time data on air pollution, heat stress, urban flooding and other climate risks. (Saur Energy International)

UK-based A&B Smart Materials, which makes biodegradable polymers for use in diapers, sanitary towels, skin care and other products, raised €1.7 million ($2 million) from Living Hope VC, Archipelago Ventures, Triple Impact Ventures and others. (EU-Startups)

Agents of Impact: Follow the Talent

Community Reinvestment Fund welcomes Chris Uhl, previously with IFF, as executive vice president of programs and partnerships… Ownership Works adds Mary Van de Graaf as a senior director… US SIF’s Stephanie Ruppp joins the Women’s Foundation of Colorado’s investment committee… Youth Climate Justice Fund is on the hunt for a director of programs… Aunnie Patton Power is launching the Innovative Finance Initiative Academy, offering courses developed with partners Roots of Impact and Village Capital for impact practitioners.