BlackRock is in the early stages of setting up a new fund for institutional investors that will make climate-related investments in emerging market countries on behalf of the Climate Finance Partnership.
Members of the partnership, which include French and German government agencies, the $10.4 billion William and Flora Hewlett Foundation, Menlo Park, Calif., and the $250 million Jeremy and Hannelore Grantham Environmental Trust, Boston, and other sources will provide the first $100 million to the fund in the form of a first-loss tranche, a news release from the Climate Finance Partnership said.
BlackRock will seek to raise at least $400 million in commitments from institutional investors for an expected $500 million first close of the fund.
BlackRock, which is a member of CFP, also will invest in the fund.
Edward Sweeney, a BlackRock spokesman, said in an interview that the firm is not disclosing the size of its commitment at this time.
The focus of the fund's portfolio managers will be on investment in private market renewable energy projects and other climate-oriented endeavors in emerging markets in Africa, Southeast Asia and Latin America, the CFP release said. At least 25% of investments will be in African nations.
Specific areas of investment will include grid-connected and/or distributed generation renewable power; energy efficiency projects in residential, commercial and/or industrial sectors; energy storage solutions; and ultralow emission, or electrified transportation and mobility services.
"As clean energy's cost advantage continues to spread around the world, clean energy in emerging markets should see substantial growth from its current low base," said Mr. Grantham, who is co-founder and long-term investment strategist at money manager Grantham, Mayo, Van Otterloo.
He added that his foundation is "pleased to support this effort to help institutional investors begin building an allocation to this promising sector."
BlackRock's Mr. Sweeney said the launch date of the emerging markets climate fund has not been set.