Axios Pro: Climate Deals

May 02, 2023

Axios Pro Exclusive Content

Welcome to Tuesday!

🥂 Join Axios Pro Deals and business editor Dan Primack for an exclusive happy hour event in San Francisco on Tuesday, May 9! Register here.

1 big thing: $750M climate fund

Illustration: Eniola Odetunde/Axios

The Oil and Gas Climate Initiative's Climate Investments arm is pursuing up to $750 million for a second fund, Alan has learned.

Why it matters: The fund will largely target investments in physical assets instead of software, joining a growing number of hardware-focused climate investment vehicles.

Details: OGCI Climate Investments has received commitments for its new "Decarbonization Acceleration Fund," though it declined to elaborate.

  • The 10-year fund will consider investments between $25 million and $75 million.
  • It'll generally target companies across a broad swath of climate tech, including energy, chemicals, metals, cement and concrete, heavy-duty vehicles, aviation, buildings and industrial agriculture.
  • Fundraising began in December with a focus on corporate and institutional investors. It expects to hold final close by Q1 2024.

Catch up fast: OGCI Climate Investments is the venture arm of a U.K.-based coalition of oil majors, including Aramco, BP, Chevron, Exxon Mobil and Shell.

  • The group raised over $1 billion for its debut climate fund. It has targeted startups engaged in methane reduction, carbon capture, and emissions reduction for hard-to-abate sectors like aviation and heavy industry.

Zoom out: A growing number of climate investors are focusing on physical assets or "hard tech." They often require more capital, longer timelines and potential higher-risk profiles than software.

  • Fifth Wall, for example, has raised a new $240 million climate fund partly focused on hardware startups in the real estate space, Axios has learned.
  • Just Climate, the U.K. investment firm set up by former vice president Al Gore, in February unveiled its first three investments — all in hard assets.
  • And Energy Impact Partners in November raised $485 million for its Deep Decarbonization Fund — a 15-year supplement to its more traditionally venture-like Flagship Fund.

View archive