BlackRock has tapped into buoyant demand from institutional investors for renewable energy infrastructure exposure, allowing it to move its latest renewable power fund to a final close at almost double the original target. BlackRock Real Assets raised US$4.8 billion for its Global Renewable Power Fund III (GRP III), which is expected to have a strong focus on opportunities in the Asia-Pacific.
There were commitments from over 100 institutional investors, including leading public and private pension funds, insurance companies, endowments, foundations and family offices from over 18 countries.
GRP III is the third in the BlackRock Global Renewable Power fund series, investing in global climate infrastructure assets, primarily in renewable power generation, across the Americas, Europe and Asia. The fund seeks to deliver attractive risk-adjusted returns with positive and measurable environmental and social impact by investing across the spectrum of renewable power and supporting infrastructure globally, including energy storage and distribution and electrified transport. Its opportunity set reflects the evolving renewable energy market as well as investors’ growing interest in investments that support the transition to a low carbon economy.
The fund follows GRP I launched in 2012, and the US$1.6 billion GRP II which was launched in 2016 with 67 investors. GRP III has already actively begun investing capital and to date has already completed three investments in Europe, Asia, and North America. These investments include onshore wind in Europe, solar in Asia, and distributed solar generation in the United States.
Last October BlackRock Real Assets entered into an agreement to acquire a majority stake in Taiwanese solar energy firm New Green Power, which is building out a 1GW solar portfolio in Taiwan over the next three to five years.
"GRP III invests in the sustainable infrastructure of the future. As the world strives toward net zero carbon emissions by 2050, the transition will have dramatic impacts not only for public equities but for private markets as well, creating significant opportunities for front-footed investors," says Jim Barry, chief investment officer of BlackRock Alternative Investors and global head of BlackRock Real Assets.
BlackRock’s Global Renewable Power platform has invested in over 250 wind and solar projects across 13 countries. The Global Renewable Power team has 54 staff.
BlackRock says in a statement that integrating sustainability can help investors build more resilient portfolios, and achieve better long-term, risk-adjusted returns. The GRP III fund has achieved the highest article 9 rating in line with European Union's Sustainable Finance Disclosure Regulation (SFDR).
The SFDR came into force in the EU in March, and is being widely followed as a global standard. It requires all financial market participants in the EU to disclose environmental, social and governance (ESG) issues, with additional requirements for products that promote ESG characteristics or that have sustainable investment objectives. The regulation aims to reduce the risk of greenwashing by financial market participants while increasing transparency, making it easier for end investors to understand how ESG and sustainability factor into their investments.
BlackRock says it is committed to helping clients navigate the transition to a net zero world, in which the economy emits no more carbon dioxide than it removes from the atmosphere. BlackRock’s goal is to offer clients a full set of climate-oriented investment options across asset classes and geographies, including strategies that seek out new opportunities in climate innovation.