🌎 $20bn of green for the Greenhouse Gas Reduction Fund #192

Happy Monday!

There might be a total solar eclipse today, but the sun is still shining on climate tech. Last week, the Biden administration unveiled how it’s allocating the $20bn in the Greenhouse Gas Reduction Fund (GGRF), the first-of-its-kind, national-scale financing program administered by the EPA under the IRA. Although its funds will largely flow to clean energy projects across buildings, transportation, and distributed energy generation — not necessarily emerging climate tech — there's still potential to address the capital gap for scaling climate tech ventures.

In deals this week, $750m in newly closed funds; $325m for renewable energy project development; and $78m for non-flammable battery technology.

In other news, Tesla might be canceling its most affordable model yet; the world’s biggest planned offshore wind farm is on track to begin construction in 2028; and China claims that the IRA’s tax credit policies violate international trade law.

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GRWM for GGRF

The US government is putting some real green into its green banking plans.

Last week, the Biden-Harris Administration announced $20bn for the Greenhouse Gas Reduction Fund (GGRF), a first-of-its-kind, national-scale financing program administered by the EPA under the Inflation Reduction Act to fund climate technologies that benefit low-income, rural, tribal and other communities. This is big-time money — GGRF represents about a sixth of the non-tax incentives in the IRA and expects to mobilize capital at a 7:1 ratio, with each GGRF dollar designed to leverage seven dollars in follow-on private capital for an overall impact of more than $160bn. It comes in the form of two vehicles, the $14bn National Clean Investment Fund (NCIF), establishing three national-scale green banks, and the $6bn Clean Communities Investment Accelerator (CCIA), capitalizing community banks for green projects.

The who, what, where, and when

The EPA announced the first eight selections, many with long track records funding clean energy projects in local communities.

NCIF

Climate United Fund, a partnership among Calvert Impact and two CDFIs, Self-Help Ventures Fund and Community Preservation Corporation — $7bn
Coalition for Green Capital (CGC), a leading national green bank partner since 2009 — $5bn (read our Q&A with Eli Hopson here)
Power Forward Communities, a partnership with Enterprise Community Partners, Rewiring America, Habitat for Humanity International, the Local Initiatives Support Corporation (LISC), and United Way Worldwide — $2bn

CCIA

The Opportunity Finance Network, a longtime national network of CDFIs — $2.3bn
Inclusiv, a CDFI network for credit unions and financial cooperatives — $1.9bn
The Justice Climate Fund, a clean energy-focused capital and capacity building network for community lenders — $940m
Appalachian Community Capital, a green bank for Appalachia and rural areas — $500m
Native CDFI Network, a nonprofit for indigenous communities’ CDFIs — $400m

The EPA wants to get the money flowing and projects off the ground as soon as possible. As Dawn Lippert, founder and CEO of Elemental Excelerator, which is collaborating with the NCIF winners and other coalitions, told us, “We expect to see GGRF funds start to flow into projects this summer; projects in our pipeline have start dates of July 2024 and onward.”

It’s partially a race against the clock ahead of a potential federal administration change, and partly because the Biden administration is hustling to meet its commitment to halve emissions by 2030.

The climate tech connection

Over the next seven years, GGRF will be used to fund "qualified projects'' across net-zero buildings, zero-emissions transportation, distributed energy generation and storage, and other climate change technologies. EPA is looking for projects which, as Dawn described, “show greenhouse gas reductions, community benefit, and the ability to recycle capital.” GGRF’s funding is targeted for technologies that have been in operation more than 5 years in the US, highlighting the need for philanthropy and investment to fund technologies and projects to meet this threshold, especially at a time when climate tech companies are trying to address the project capital gap.

Special thanks to Dawn Lippert, Avra van der Zee, Melissa Uhl, Christina Angelides, and Sam Grassle from Elemental Excelerator for helping us get ready for GGRF. Elemental aims to serve as a front door for innovators and investors to access GGRF capital, through building a pipeline of local projects and providing support such as technical assistance and innovation challenges (e.g., the Resilient New Orleans funding opportunity open now).

Deals of the Week (4/1 - 4/7)

Late-Stage / Growth

🔋 Alsym Energy, a Woburn, MA-based non-flammable battery technology developer, raised $78m in Series C funding from General Catalyst, Tata Group, Drads Capital, Thomvest Ventures, and Thrive Capital.

⚡ Exoes, a Gradignan, France-based advanced thermal system developer, raised $38m in Growth funding from Bpifrance and Meridiam.

🌾 BioConsortia, a Davis, CA-based microbes for agriculture platform, raised $15m in Growth funding from Otter Capital Partners.

Early-Stage

🥩 Onego Bio, a Helsinki, Finland-based animal-free egg white protein producer, raised $40m in Series A funding from NordicNinja, Agronomics, Business Finland, EIT Food, Holdix, and other investors.

☔ BurnBot, a San Francisco, CA-based wildfire mitigation platform, raised $20m in Series A funding from ReGen Ventures, AmFam Ventures, Blue Forest Asset Management, Convective Capital, Lowercarbon, and other investors.

🌱 Iceberg Data Lab, a Paris, France-based environmental data solutions platform, raised $10m in Series A funding from Beringea, AXA Investment Managers, and MAIF Impact.

🏭 Polar Night Energy, a Tampere, Finland-based high-temperature heat storage developer, raised $8m in Seed funding from Holdix, PC Rettig & CO Impact, and Stephen Industries.

⚡ Ammobia, a San Francisco, CA-based green ammonia developer, raised $4m in Seed funding from Starlight Ventures, Collaborative Fund, Chevron Technology Ventures, and Plug & Play.

🌱 Orchard Robotics, a Seattle, WA-based precision farming platform, raised $4m in Seed funding from General Catalyst, Humba Ventures, Soma Capital, Correlation Ventures, VU Venture Partners, and other investors.

📦 Sparxell, a Cambridge, UK-based biodegradable pigment manufacturer, raised $3m in Seed funding from Circular Innovation Fund, Future Communities Capital, Joyance Partners, Katapult, PDS Venture, and SNØCAP VC.

🚗 BasiGo, a Nairobi, Kenya-based EV bus developer, raised $3m in Seed funding from CFAO.

🏭 Alternō, a Singapore City, Singapore-based sand battery thermal energy storage developer, raised $2m in Seed funding from Antler, Glocalink Singapore, Impact Square, The Radical Fund, and Touchstone Partners.

🥩 Ironic Biotech, a Lund, Sweden-based bioavailable iron for food platform, raised $1m in Pre-Seed funding from Nordic Foodtech VC.

Other

⚡ MN8 Energy, a New York City, NY-based renewable energy project developer, raised $325m in funding from Mercuria and Ridgewood Infrastructure.

🏠 Torus, a Lehi, UT-based residential battery technology company, raised $67m in equity and debt from Origin Ventures, Cummings Foundation, EPIC Ventures, ICONIQ Capital, Larry H. Miller Management Corporation, and other investors.

💨 ION Clean Energy, a Boulder, CO-based liquid amine CO2 capture tech developer, raised $45m in Corporate Strategic funding from Chevron New Energies and Carbon Direct.

New Funds

Quinbrook Infrastructure Partners, a London, UK-based investment firm, held a final close of its $600m fund that invests in solar and storage projects.

Maniv Mobility, a Tel Aviv, Israel-based investment firm, held a final close of its $140m fund that invests in early-stage transportation and mobility companies.

Empirical Ventures, a Bristol, UK-based investment firm, raised $10m for its fund that invests in deeptech companies.

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In the News

Tesla reportedly canceled its plans to build an affordable model, casting doubt on the company’s ability to stay competitive globally. Investors had been counting on the $25,000 Model 2 to boost Tesla’s profile and achieve its goals of bringing EVs to the mass market, especially as China EV makers surge ahead.

The world's biggest offshore wind farm planned to-date just received environmental approval, often one of the hardest steps. It’s set to generate 5.5 GW from the Baltic Sea, off the Swedish coast. Meanwhile, the Biden administration green-lit the eighth offshore wind project in the US, the New England Wind Project, with a planned 2.6 GW of capacity.

China launched a dispute at the World Trade Organization over the IRA’s tax credit policies, raising questions about their compatibility with international trade rules. China regulators claim that the policy favors domestic goods over imports and discriminates against Chinese products.

The US Department of Energy, along with the Treasury and IRS, unveiled a new $4bn tax credit program as part of the Inflation Reduction Act to incentivize clean energy manufacturing. The credits were distributed to over 100 projects including recycling projects, critical materials, processing and refining, and industrial decarbonization.

Shell started an appeal against the landmark 2021 Dutch court ruling that mandated the company reduce its carbon emissions by 45% by 2030. A new ruling could have major implications for the wave of climate litigation against fossil fuel companies.

The Federal Reserve blocked stricter global climate risk requirements for Wall Street banks, against a global banking watchdog’s recommendations. The now-scrapped rules would have required banks to regularly report out their strategies on meeting climate commitments so that investors and regulators could better understand their risks.

India announced plans to boost its nuclear power output to 100 GW by 2047, marking a staggering 1,250% increase from current levels, in an ambitious energy policy shift.

A recent study revealed that US landfills emit nearly three times more methane than previously reported to federal regulators. Researchers installed imaging spectrometers on airplanes and flew over 250 operating US landfills between 2018-2022 to gather data, which showed that landfills likely had leaks in the on-site pipes meant to trap the methane.

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Opportunities & Events

📅 Live Term Sheet Negotiation: RSVP to join Sophie for a debate-style mock term sheet negotiation on closing a real, recent climate tech Seed raise on April 16th in the company of other climate tech professionals.

📅 Young Professionals Happy Hour: Register to attend the Young Professionals in Climate Tech: Happy Hour on April 18th to grab a drink and meet others in the NYC climate tech capital community.

📅 SF Climate Week: Register to join thousands of others at San Francisco Climate Week from April 21-27th and access hundreds of events centered around the clean energy transition. If you already have a full dance card, here are some highlights.

📅 AI for Earth: Register to join the 2nd annual AI for Earth panel hosted by Jetstream and Toba on April 22nd for insight into the frontier of AI x climate mitigation, resilience, and biodiversity.

📅 Government Accelerating Climate Investment: Register for Commonweal Ventures’ virtual event on April 22nd to learn how public and private commitments are reshaping decarbonization.

📅 Female Founders & Funders Happy Hour: RSVP to join Sophie for conversations and libations with a few hundred women working in climate on April 24th during SF Climate Week.

💡 Dream Launchpad: Apply to the 2024 Dream Climate Tech Launchpad by April 30th for a milestone-based accelerator program to support your Black or Latinx-led climate tech startup in the built environment, electric, transportation, or infrastructure sector.