Citi Impact Fund to make initial equity investment of $50 million to support climate technology projects
New York / Glasgow – Citi today announced a partnership with Breakthrough Energy Catalyst, a groundbreaking program from Breakthrough Energy to accelerate the development of clean energy technologies that will help achieve net zero emissions by 2050. Catalyst, a program within the larger Breakthrough Energy network founded by Bill Gates, is a new model for public-private sector partnership to build the foundation of a net zero economy. It brings together businesses, governments, philanthropies and individuals to invest in critical decarbonization technologies that will help solve the climate crisis. As an anchor partner, Citi is aiming to deploy $100 million over the next five years to help fund the program's efforts to rapidly scale and commercialize climate technology projects. This was announced at the United Nations Climate Change Conference (COP26).
"Getting to net zero by 2050 requires an all-hands effort to reduce greenhouse gas emissions, and investing in innovative technologies at scale is a critical component of that," said Jane Fraser, CEO of Citi. "Citi is joining the Catalyst program alongside public and private sector leaders to unleash our collective expertise and resources. This partnership complements our significant financings of existing green technology and is truly a down payment for the next generation of climate solutions."
"Avoiding a climate disaster will require a new industrial revolution. Half the technology needed to get to zero emissions either doesn't exist yet or is too expensive for much of the world to afford. Catalyst is designed to change that and provide an effective way to invest in our clean technology future," said Bill Gates, Founder of Breakthrough Energy. "By working with this growing community of private and public partners, Catalyst will take a global view of the energy innovation landscape – the key technologies, leading-edge companies, financing partners, and pivotal policies – and fund the projects that will have the greatest positive impact for our planet."
An initial equity investment of $50 million will be provided through an expansion of the Citi Impact Fund, and Citi will explore mechanisms to fund the remaining $50 million. The Citi Impact Fund is a component of Citi's community investing efforts and was launched in early 2020 to make equity investments in private sector companies that are applying innovative solutions to help address some of society's most pressing challenges, including workforce development, financial capability, physical and social infrastructure, sustainability, and access to capital and economic opportunity.
This commitment to Catalyst brings the Citi Impact Fund's total resources to $250 million and represents the Fund's first major investment in a sustainability-focused fund, enabling Citi to continue making equity investments in 'double bottom-line' companies focused on clean energy solutions. These efforts will also support Citi's $1 trillion commitment to sustainable finance by 2030.
By working across the public and private sectors, Catalyst and its partners will help reduce the costs of clean technologies so they can compete and replace the greenhouse gas-emitting counterparts we have today. This will lower Green Premiums and ultimately accelerate the widespread adoption of clean technologies. The program will initially focus on four key areas: direct air capture, green hydrogen, long-duration energy storage and sustainable aviation fuel.
Catalyst and its partners are currently reviewing input submitted through an open Request for Information process connected to Catalyst's four initial technology focus areas. Informed by this, Catalyst expects to announce its first formal Request for Proposal by the end of the year.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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Breakthrough Energy Catalyst
Breakthrough Energy Catalyst is a first-of-its-kind model to finance, produce, and buy the new solutions that will underpin a zero-carbon economy. Catalyst seeks to bring together the public and private sectors to fund commercial-stage demonstration projects for critical decarbonization technologies. Catalyst will address the early deployment funding gap for these technologies and provide a structure to accelerate their commercialization. Catalyst will start by funding projects across four technologies: direct air capture, green hydrogen, long-duration energy storage, and sustainable aviation fuel. In the future, Catalyst intends to expand the same framework to other necessary innovations, like low-carbon steel and cement.