TPG-Owned Anew Climate Invests up to $640 Million in Terra Global
Anew Climate LLC, a TPG Inc-owned provider of carbon emission reduction products to businesses, has agreed to invest as much as $640 million in carbon offset developer Terra Global Capital, the companies told Reuters on Wednesday.
The carbon offset market has grown as companies seek ways to reduce their carbon footprint when they cannot curb emissions related to their own activities enough to meet their goals. This demand gave Anew the confidence to make an investment of this scale, said Randy Lack, Anew’s head of portfolio management.
“We have been looking for a platform partner to do NBS (nature-based solutions) and Terra Global has a fantastic track record,” Lack said in an interview. Nature-based solutions refer to sustainable management techniques employed in an area to help mitigate humanity’s environmental impact.
Critics of the carbon offsets market have questioned the reliability of the projects underpinning them. Lack said Anew would work “hand-in-glove” with Terra Global to ensure all projects meet tight criteria on environmental and social impacts.
Anew’s capital commitment will be split between buying into Terra Global’s equity, and contributing as anchor investor in a new fund dubbed the Terra Bella Fund, the companies said.
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“The equity investment by Anew is catalytic to the growth of Terra Global,” Leslie Durschinger, founder of Terra Global, said in an interview.
Oakland, California-based Terra Global works with government agencies and community groups in developing nations on projects which reduce carbon emissions through land management practices, such as preventing deforestation and implementing more efficient farming methods.
The Terra Bella NBS Carbon Pool is an investment vehicle to finance projects in exchange for verified carbon reductions over a set time period. These reductions – audited under international standards by a third party – will be the basis for carbon credits sold to investors and companies seeking to meet their own climate goals.
Anew was formed last year through the merging of Bluesource and Element Markets and is majority-owned by TPG Rise, the impact investing arm of TPG.