$50 Billion Climate Change Investment Initiative
By Bruce Schlein, Director of Corporate Sustainability, Citi April 23, 2014 04:19 PM
Back in 2007, Citi set a landmark goal to direct $50 billion over 10 years to activities that mitigate climate change. The scope of this initiative includes internal operational projects as well as financing for alternative energy, energy efficiency, investments in clean technology, and lending for green affordable housing and other community assets. This week, we announced that we have reached this goal three years early, directing $53.85 billion to these initiatives through the end of the year. We are very proud of this achievement and are now developing a new target, with the aim of spurring additional environmental financing and expanded reporting.
Over the course of the initiative a wide range of projects and activities contributed to the goal. Highlights include:
• Peru's first wind farms. Two installations producing 114MW, were bought in 2012 by ContourGlobal, an independent power group based in New York, in a deal in which Citi acted as exclusive financial advisor to the then-owner, Montealto Corporación XXI, S.L., a Spanish energy and infrastructure company. The transaction was valued at approximately $250 million.
• A 579 MW Solar Star photovoltaic installation in southern California, which is expected to be the largest solar project in the world when complete. Transacted in 2013, Citi's $1 billion Solar Star Series A offering is still the largest single renewable energy project finance bond offering executed to date.
• Financing to Bay Environmental Technology Corp. in Beijing through Citi Commercial Bank China. This environmental solution provider creates industrial pollution control applications focused on gas recycling, and has assisted with large-scale pollution control projects.
• A $100 million loan to Kilowatt Financial, a leading clean energy consumer finance company, to finance energy efficiency loans for home owners. To quote a colleague, Marshal Salant, Head of Alternative Energy Finance at Citi, "The move is significant not just because it is a first, but because it enables securitization of this market. Institutions such as pension funds and insurance companies will now be able to invest in this area, where before they have lacked such opportunities due to scale."
The reaching of the $50 billion goal is something we can all be proud, and especially the numerous teams and individuals at Citi who contributed.
While we're very proud of what we've accomplished, we know there is still much more to be done. We are now preparing to establish a new environmental finance target, which would include climate mitigation activities as well as other financing to support the environment and help communities and cities adapt to our changing climate. Stay tuned for an update in the coming months!