As part of the Biden-Harris Administration’s Investing in America initiative, the US Department of Energy’s Loan Programs Office (LPO) has finalized a $15 billion loan guarantee for Pacific Gas & Electric Company (PG&E). Northern and Central California will benefit from the power provider’s project as PG&E sought the loan in June 2023. Funds raised will cater for Project Polaris, which is a far-reaching effort by enhancing California’s energy infrastructure by expanding its hydropower generation, increasing the battery storage capacity, upgrading transmission networks, and creating virtual power plants throughout the service area.

The aim is to serve increasing energy demand, strengthen grid resilience, and make electricity cheaper for customers in California.

Milestone for Energy Infrastructure Reinvestment

This loan guarantee represents the first Energy Infrastructure Reinvestment (EIR) project to reach financial close under LPO’s flexible financing model for regulated, investment-grade utilities. EIR projects must ensure that utilities pass the financial benefits from loan guarantees directly to their customers or communities. The loan’s lower interest rates help reduce costs for PG&E’s 16 million customers, easing financial pressure on them.

LPO carefully reviews projects to ensure they meet eligibility and environmental standards, confirming PG&E can successfully deliver its plans.

Also read: DOE Announces $101 Million for Carbon Management Test Centers

Assistance to Communities and Employment Generation

PG&E has joined the International Brotherhood of Electrical Workers (IBEW) Local 1245 in providing training and job opportunities to underserved groups through its PowerPathway program. Currently, about two-thirds of PG&E’s workforce are union members. The Polaris Project will create thousands of jobs, supporting local communities and strengthening the economy through construction and operational opportunities.

PG&E’s CBP focuses on meaningful community and labor engagement to create quality jobs and support local well-being. PG&E will prioritize its programs in disadvantaged communities identified as needing the most support using the Climate and Economic Justice Screening Tool.

This investment supports the Biden-Harris Justice40 Initiative, ensuring 40% of clean energy benefits reach underserved and marginalized communities.

The EIR program, created by the Inflation Reduction Act, helps modernize energy infrastructure through the Title 17 Clean Energy Program. These projects aim to repurpose or replace outdated energy facilities and reduce greenhouse gas emissions or other pollutants.

By December 2024, LPO had 182 applications for clean energy projects nationwide, requesting over $278.9 billion in funding.

New Forests has successfully closed its Australia New Zealand Landscapes and Forestry Fund (ANZLAFF), raising $375 million. This amount came from institutional investors across Europe and the Asia-Pacific region. The fund aims to offer diversified exposure to forestry, agriculture, and carbon markets in Australia and New Zealand.

Key Investors in ANZLAFF

ANZLAFF attracted three new participants: Finland’s Evli, Japan’s Kyushu Electric Power, and a German insurer. Returning investors include Sweden’s Andra AP-fonden (AP2), the German pension group Bayerische Versorgungskammer (BVK), and the Australian Government’s Clean Energy Finance Corporation (CEFC).

Also read: Climate Investment Funds Capital Markets Mechanism Makes Market Debut

Roger Naylor, representing Evli, emphasized the fund’s ability to balance strong environmental, social, and governance (ESG) standards. He also noted the diversification benefits it offers. Kyushu Electric Power’s Kenjiro Miura praised the fund for its environmental contributions and stable return potential.

Portfolio Focus and Climate Goals

ANZLAFF focuses on integrated investments to maximize value. Its portfolio includes forestry plantations, agricultural assets, and infrastructure. Revenue streams come from carbon credits, biodiversity initiatives, and renewable energy projects.

The fund plays a key role in climate mitigation. It supports carbon sequestration and emissions reductions, which align with regional climate goals.

A Year-Long Journey to Final Close

The fund reached its final close 12 months after its initial announcement. The first commitments came from five key investors, including AP2, BVK, and CEFC, as well as an Australian and a German insurer.

By blending investments across forestry, agriculture, and renewable energy, ANZLAFF seeks to position itself as a leader in sustainable resource management. This strategy contributes to both financial growth and environmental sustainability.

Growing Interest in Sustainable Investment

New Forests’ initiative highlights the increasing institutional interest in funds that combine financial performance with environmental impact. Investors are increasingly looking for sustainable investments that contribute to climate goals while offering strong returns.

In conclusion, ANZLAFF’s successful fundraising marks a significant step in sustainable investing. Its focus on forestry, agriculture, and renewable energy ensures it addresses critical environmental issues while delivering financial benefits.