The biggest clean-energy investor in private markets is widening its lead, tapping into rising demand for wind and solar power and a push by big companies to reduce emissions.
The biggest clean-energy investor in private markets is widening its lead, tapping into rising demand for wind and solar power and a push by big companies to reduce emissions.
Infrastructure investing giant Brookfield Asset Management said it hopes to raise more than $25 billion for two new private funds investing in clean energy. The firm said Monday it has taken in $10 billion for its latest energy transition fund and will continue fundraising for it. Brookfield expects to raise billions more in an emerging-markets-focused fund.
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Infrastructure investing giant Brookfield Asset Management said it hopes to raise more than $25 billion for two new private funds investing in clean energy. The firm said Monday it has taken in $10 billion for its latest energy transition fund and will continue fundraising for it. Brookfield expects to raise billions more in an emerging-markets-focused fund.
The latest cash infusion gives Brookfield firepower for climate projects that only the largest investment firms and energy producers such as BlackRock and NextEra Energy can match. It also shows investor confidence in the sector, despite the permitting, construction and cost challenges facing many clean-energy developers.
Across all its funds, Brookfield says it has deployed over $100 billion in renewable-power and energy-transition investments. That figure has surged in the past few years.
Demand for renewable energy continues to climb, with cities and companies looking for cleaner ways to power everything from data centers to manufacturing plants. The growth is being supercharged by tighter climate regulations, along with generous government incentives in the U.S. and other major economies.
“The demand, particularly from corporates for green power, is simply overwhelming,” Connor Teskey, the head of Brookfield’s renewable power and transition business, said in an interview.
Total global investment in the energy transition hit about $1.8 trillion last year, a 17% increase from 2022, according to BloombergNEF. That was still far short of the $4.8 trillion the data provider estimates is needed annually from 2024 to 2030 to meet the world’s climate targets.
Brookfield hopes to fill some of the gap. Its new fund will invest in a range of projects, starting with a wind farm operator in the U.K. and a partnership with a solar developer in India.
The firm’s first energy transition fund a few years ago raised $15 billion. That fund’s investments include U.S. renewable developers, carbon-capture startups and a deal to buy nuclear-power services provider Westinghouse Electric. The new fund is on track to be larger.
Brookfield also uses its energy-transition funds to buy fossil-fuel projects and says that responsible ownership of them is needed to reduce their emissions over time. It recently led a consortium that tried to buy Origin Energy, one of Australia’s largest power companies, for $11 billion and take it private. Shareholders rejected the deal, nearly two years after investors in Australia’s AGL Energy rejected a bid from Brookfield and Australian billionaire Mike Cannon-Brookes.
Teskey said Brookfield will consider similar deals despite the setbacks. The firm will also consider putting money from the new fund into industrial companies that need to cut emissions, such as manufacturers, steelmakers and cement producers. Environmentalists say such investments can be an excuse for big firms to keep putting money into polluting sectors.
Brookfield’s energy transition funds are co-led by Teskey and Mark Carney, the former head of central banks in the U.K. and Canada and the point person on climate finance for the United Nations. At the U.N. summit last year, the United Arab Emirates said it was putting $2 billion into Brookfield’s new energy-transition fund and up to $1 billion into the emerging-markets fund.
Teskey also heads Brookfield’s publicly traded renewables unit. That unit puts money into the transition funds, as well as the firm’s infrastructure investment funds.
“What we bring is scale,” he said.
Write to Amrith Ramkumar at [email protected]
