BlackRock Incorporated and Singapore’s Temasek Holdings have formed a joint venture (JV), Decarbonization Partners, to invest in start-up firms that have the potential to reduce dependence on fossil fuels and achieve the target of zero-carbon emissions within three decades. The JV will focus on providing late-stage venture capital (VC) to start-ups. The companies are pledging USD600 million in total, including USD300 million in seed funding for a USD1 billion first fund, and raising the remaining amount from external investors.
Decarbonization Partners will work similar to a conventional VC fund, requiring investors to commit funds for a period of around ten years and aiming for annualised returns of about 20 per cent. The JV will also focus on energy storage, self-driving cars, and power grid stability, as well as materials and process advancement for industry and infrastructure.
Temasek, a state-owned investment firm with a USD230 billion portfolio, is working towards cutting net carbon emissions by half by 2030 and to zero by 2050.