Creative collaboration is key to advancing low-carbon infrastructure projects in emerging economies, and BlackRock Real Assets is honored to work with the Climate Finance Partnership to work to mobilize private capital for these important projects. BlackRock has helped clients seize opportunities in the global energy transition since 2011. Now, as one of the largest managers of renewable infrastructure assets in the world, we believe this initiative marks an important step forward in the advancement of low carbon investing worldwide.
Global Head of BlackRock Real Assets
Foundation and government partners of the CFP will provide up to $100 million in concessionary capital, or impact-focused investments that yield lower returns below market rates. This funding is contingent on BlackRock mobilising at least four times that amount of private capital. When combined, this will result in a fund with a capital mobilisation ratio rate several times higher than the average rate of current blended finance vehicles in the market. The concessionary funds will effectively serve to unlock the resources and breadth of much wealthier institutional investors and ensure that each dollar of public and philanthropic capital has an outsized impact on unlocking climate solutions. Furthermore, concessionary investors will be rewarded for their higher-risk position in the fund with a disproportionate share of the fund’s upside performance. Thus, the CFP provides a unique and innovative mechanism for foundation and government investors to recycle returns from these loans into additional climate finance opportunities. By selecting BlackRock as the fund manager, CFP partners are encouraging the world’s largest asset manager and its institutional investor clients to deploy capital into climate-related investments in emerging markets, while providing a powerful and replicable demonstration effect for funds to follow. When it launches, the CFP will be a leading example of the power of partnerships in achieving shared climate finance objectives.
Climate change is an enormous threat, and we need to start implementing solutions now to save lives, to safeguard our future, and to secure the work we do in virtually every other area of our philanthropic work. Mobilizing institutional capital is a key part of the solution, and we are proud to be a partner in the Climate Finance Partnership to test new mechanisms to move capital at the necessary scale.