Temasek, BlackRock partner to invest $600m in decarbonization fund

Singapore state-owned investment company Temasek announced it has partnered with investment management firm BlackRock to launch a series of late-stage venture capital and early-growth private equity investment funds that will focus on advancing decarbonization solutions.

Photo credit: Temasek

The companies will invest a combined US$600 million as initial capital in the funds. They are targeting US$1 billion for the first fund, including capital from both Temasek and BlackRock.

Called Decarbonization Partners, the partnership will focus on funding early-stage growth companies that are targeting renewable and mobility technology, including emerging fuel sources, grid solutions, battery storage, and electric and autonomous vehicle technologies.

The funds will also be invested in the building and manufacturing sectors to drive decarbonization, resource efficiencies, and material and process innovation.

“The world cannot meet its net zero ambitions without transformational innovation,” said Larry Fink, chairman and CEO of BlackRock. “This partnership will help define climate solutions as a standalone asset class that is both essential to our collective mission and a historic investment opportunity created by the net zero transition.”

The new funds will also raise third-party capital from investors who seek to obtain long-term sustainable financial returns. The partnership will leverage both Temasek’s and BlackRock’s knowledge in sourcing and underwriting private investments, portfolio and risk management, and sustainable technology and analytics.

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Employees from both firms will work toward managing the new funds, along with a separate professional team that will source and undertake investments and manage its portfolio.

Temasek is Singapore’s state-owned investment company with a net portfolio value of S$306 billion (US$214 billion) as of March 31, 2020.