- A $750 million climate solutions investment platform has been introduced by Bahrain-based Investcorp, a global alternative investment management company that focuses on growth-stage businesses in North America, Europe, the Middle East, and Asia.
- It will go after businesses that generally provide solutions to address the effects of climate change and decarbonization.
- In the next four to five years, the company intends to make ten to fifteen investments in climate tech firms, each of which will get money ranging from $50 million to $75 million.
A $750 million climate-focused investment platform has been introduced by alternative asset management Investcorp. Its goal is to invest in businesses that are focused on creating cutting-edge goods and technologies that can lower emissions worldwide.
Investcorp co-chief executive Rishi Kapoor told The National that the company intends to make 10 to 15 investments in these kinds of businesses over the course of the next four to five years, with each capital round costing between $50 million and $75 million.
Investcorp, whose largest stakeholder is Mubadala Investment Company, will make investments in businesses with proven technologies that help decarbonization activities in North America, Europe, the Middle East, and Asia, particularly in the Global South.
“We feel that the appeal, and more importantly, the need for these products and services is most acute in the Global South because that is the part of the world that is arguably facing a disproportionate share of the risk associated with climate change,” Mr Kapoor said.
“Through our investment in these companies all over the world, we can help them lower their economic costs through accelerated growth and take them to the Global South at a much more affordable and attractive price point and therefore help the … economies to mitigate the risk of climate change.”
The sovereign wealth fund of Bahrain, Mumtalakat Holding Company, also declared that it is collaborating with Investcorp to serve as the platform’s anchor.
The announcement from Investcorp coincides with the Cop28 climate summit being held in Dubai and global discussions about how to increase investment in decarbonization technologies.
A recent research by the International Renewable Energy Agency (Irena) states that in order to meet the pledges made under the Paris climate agreement, global investment in energy transition technologies has to triple to $35 trillion by 2030.
The amount invested in renewable energy technology hit a record $1.3 trillion last year, but the Abu Dhabi-based agency stated that in order to keep temperature increases to 1.5ºC over pre-industrial levels, that amount needs to expand to almost $5 trillion yearly.
According to a World Economic Forum research released this week, investments of up to $13.5 trillion will be required by 2050 to assist difficult-to-abate sectors like production, energy, and transportation in transitioning to a sustainable and carbon-neutral future.
With $50 billion in assets under management, Investcorp wants to achieve net zero status by 2050. Additionally, it intends to help the businesses it has invested in decarbonize their operations by implementing climate-friendly measures.
“We have completely aligned ourselves with the companies we invest in, utilizing our own exclusive framework for responsible investment,” Mr. Kapoor stated. “We have them outline and map out an agenda towards decarbonization, fully aware that we own these companies for a relatively short period of time, typically around four or five years.”
“But setting them on that path is the important bit and during that journey with us, carefully monitoring and measuring their actual progress in terms of emissions reduction against targets and reporting those is another important element.”
The organization invests in over 70 businesses worldwide in industries including infrastructure, e-commerce, real estate, and technology.