Apollo's $4 billion ACT

PLUS: NextEra-CF JV in Oklahoma, Quantum's £300 million Scotland bet, Summit-NextGen,Venture Climate Alliance

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  • Apollo Global Management has launched a new investment strategy called Apollo Clean Transition Capital (ACT Capital).

  • ACT Capital seeks to redefine the capital market for climate solutions by providing competitive, flexible, and patient financing to support corporates in their transition to clean energy and sustainable industry.

  • The strategy launches with $4 billion in deployable capital from Apollo affiliates and strategic partners.

  • ACT Capital will work towards Apollo's sustainable investing platform target of deploying $50 billion in clean energy and climate capital by 2027, and sees the opportunity to deploy more than $100 billion by 2030.

  • Given the approximately $4.5 trillion in investments needed annually to achieve the global energy transition by 2050, ACT Capital seeks to accelerate the pace of climate and transition capital deployment.

  • The strategy will leverage Apollo’s sourcing capabilities across market cycles to target global opportunities in energy transition, industrial decarbonization, sustainable mobility, sustainable resource use, and sustainable real estate.

  • Apollo’s broader sustainable investing platform and sustainability ecosystem will be employed to execute the strategy.

  • ACT Capital is expected to address significant gaps that exist in the capital markets for climate and transition financing.

  • CF Industries and NextEra Energy Resources have announced a memorandum of understanding (MOU) for a joint venture to develop a zero-carbon-intensity hydrogen project at CF Industries' Verdigris Complex in Oklahoma

  • The project envisions a 100 MW electrolysis plant at the Verdigris Complex powered by a dedicated 450 MW renewable energy facility developed by NextEra Energy Resources, with CF Industries as the sole offtaker of 100% of the zero-carbon green hydrogen output

  • The green hydrogen would be used to produce up to 100,000 tons per year of zero-carbon green ammonia, which would be facilitated by debottlenecking Verdigris' ammonia plants

  • The green ammonia production is expected to support the transition of American agriculture to low- and zero-carbon fertilizers and help remove up to 130,000 metric tons of carbon dioxide emissions from the agriculture supply chain each year

  • The proposed project was included in the funding application submitted to the U.S. Department of Energy (DOE) this month by the HALO Hydrogen Hub, and support from the DOE program will be a key aspect of the project evaluation process

  • A final investment decision has not been made for this project.

  • Ardersier Port in Scotland receives £300m equity investment from Quantum Energy Partners

  • Haventus Limited to be established as the new parent company of Ardersier Port and Lewis Gillies named CEO of Haventus

  • The port was historically a former McDermott construction yard

  • Redevelopment of 450-acre Ardersier Port will enable support for offshore wind projects and domestic decommissioning of North Sea oil and gas assets

  • The investment will create thousands of construction jobs and ongoing employment opportunities in the energy industry and maintenance of offshore wind fleet and decommissioning of North Sea assets

  • Ardersier Port's redevelopment will revive its position as a major local employer

  • Summit Carbon Solutions has signed a multi-year agreement to sell Carbon Dioxide Removal credits (CDRs) to NextGen CDR Facility.

  • NextGen is a joint venture between South Pole and the Mitsubishi Corporation, with plans to purchase over one million tons of CDRs by 2025.

  • NextGen announced the purchase of 193,000 tons of CDRs from three projects, including a leading U.S. direct air capture project and a Finnish biochar manufacturer, making this one of the largest CDR transactions to date.

  • The CDRs must be from large-scale technical carbon removal projects and certified under standards endorsed by the International Carbon Reduction and Offset Alliance (ICROA).

  • Summit Carbon Solutions has developed a methodology for Biomass Carbon Removal and Storage (BiCRS), currently under review with Gold Standard for the Global Goals to meet the stringent requirements.

  • NextGen's initial purchase commitments from three projects puts them on a clear pathway to realize their target of 1M durably stored tons of CO2 by 2030.

  • Summit Carbon Solutions is providing critical infrastructure at scale needed to support the build-out of the carbon removal industry in the USA.

  • Braya Renewable Fuels has announced a $300 million preferred equity investment from Energy Capital Partners (ECP), which completes the financing for the conversion of Braya's Come-By-Chance refinery to renewable fuel operations.

  • The project will supply 18,000 barrels per day of low carbon renewable fuel with expansion plans to increase capacity and enhance production of sustainable aviation fuel.

  • Combined fuels, including renewable diesel, sustainable aviation fuel, hydrogen, and ammonia, will provide alternatives to fossil fuels and reduce the emissions associated with hard-to-abate sectors such as heavy transport, aviation, and heavy industry.

  • ECP joins Braya's current owners, Cresta Fund Management and North Atlantic Refining Corp. (NARC), which is managed by Silverpeak.

  • The Venture Climate Alliance (VCA), a coalition of more than 20 venture capital firms, has been created to increase VC industry commitments to climate tech.

  • The VCA has laid out guidance for VC members and their portfolio companies to achieve net-zero emissions by 2050.

  • The alliance aims to ensure that methodology and metrics determine what is a good climate investment and to have the greatest positive effect on the mission to build tech for a regenerative world.

  • Generalist VC firms will need to make routine assessments of their carbon footprint and align their early-stage startup bets with net-zero goals.

  • VC firms signed up to the alliance will have to ensure that the technology they’re investing in has the potential to save at least 100 megatons of carbon dioxide emissions.

  • Other funds signed up to the VCA include climate VCs World Fund, 2150, and Prelude Venture, and collectively, they manage a combined $62.3 billion in assets.

  • The United Nations approved the VCA as part of its Race to Zero campaign, which falls under the Glasgow Financial Alliance for Net Zero.

  • Mark Carney, former Bank of England governor and currently co-chair of the GFANZ, said investing in climate solutions was critical to achieving a comprehensive, economy-wide transition to net-zero.

  • The VCA aims to amplify efforts by tech startups and their venture backers to combat the climate crisis with new technologies.

  • The climate tech sector saw funding drop 10% in 2022, raising $50 billion compared to the $79 billion raised by fintech companies.

  • Valuations in the climate tech space also fell by 30% in 2022.

  • VC investment as a whole has slumped dramatically in the past year, and the collapse of Silicon Valley Bank in March was a major blow to the sector.

Quote of the week

Natural gas - and the infrastructure, such as MVP, that supports its delivery and use - can play an important role as part of the clean energy transition

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.