Meghan Sharp., Decarbonization Partners
Meghan Sharp., Decarbonization Partners

Decarbonization Partners, a joint venture from BlackRock and Temasek, has held a final close on its debut fund having raised $1.4 billion. Decarbonization Partners Fund I is a late-stage venture and growth equity fund and is already 25 percent deployed across seven investments. The initial target for the fund was $1 billion.

The fund attracted capital from more than 30 limited partners, the firm said on Thursday. These include: US insurer Allstate, Spanish banking group BBVA, Danish family office KIRKBI, Japanese banks Mizuho and MUFG, and energy company TotalEnergies. Between them the two JV partners committed $600 million to the fund series.

Decarbonization Partners, which operates out of BlackRock’s offices, was set up in April 2021. It describes itself as a platform to convene investors rather than simply a manager of capital. “Decarbonization Partners deliberately set up as a purpose-built entity that can uniquely convene and collaborate with key players in the climate ecosystem,” said Meghan Sharp, global head of the firm.

Mizuho, for example, described itself as “establishing a strategic relationship” with the firm at the start of 2023, which “will enable Mizuho to introduce its clients to the global Decarbonization Partners ecosystem, which may create financing and partnership  opportunities for new, innovative companies in which Decarbonization Partners invests”.

The seven investments already made by the fund run the energy transition gamut from services and materials relating to lithium-ion batteries (Group14), to thermal energy storage (Antora), to carbon management services (Carbon Direct). Investee companies have “de-risked technologies that are ready to scale”, the firm says.

With a total fund size of $1.4 billion, Decarbonization Partners is confirmed as one of the larger VC/growth equity funds operating in the climate space. Other firms in this space include Goldman Sachs Asset Management and General Atlantic’s BeyondNetZero.

“Addressing the climate crisis requires innovation at scale, as well as significant and sustained financial resources to enable that,” said Dilhan Pillay, CEO of Temasek. “No single entity can do it on their own. We’re pleased and encouraged to see many other partners and investors coming on board for Decarbonization Partners’ inaugural fund.”

Editor’s note: This article has been updated to clarify that the two joint venture partners committed $600m to the firm’s series of funds, rather than just Fund I.