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Blackstone Makes ESG Splash with Green-Energy Lending Strategy

Photovoltaic panels at the Calexico Solar Farm II in this aerial photograph taken over Calexico, California, U.S. on Friday, Sept. 11, 2020. As the threat of blackouts continues to plague California, officials are pointing to battery storage as a key to preventing future power shortfalls. But the Golden State is going to need a lot more batteries to weather the next climate-driven crisis—let alone to achieve its goal of a carbon-free grid. Photographer: Bing Guan/Bloomberg

(Bloomberg) —

Blackstone Inc. has launched a new renewable-energy lending strategy as part of the private equity firm’s commitment to invest $100 billion in green projects over the next decade.

The firm has established the Sustainable Resources Credit Platform to focus on lending to companies that are expanding solar usage to the residential sector, providing renewable electricity generation and storage services, as well as other businesses aiding decarbonization, according to a statement Friday. 

Blackstone will target investments across investment grade and non-investment grade debt as well as preferred and convertible securities.

The move is part of Blackstone’s push into further funding transition to renewable energy in the U.S. Across all of Blackstone’s platforms, the firm aims to put $100 billion over the next 10 years into projects and companies aiding the green transition. The firm said it has committed $15 billion since 2019 in areas that are aiding the broader energy transition.

Private credit has lagged the financing boom in all things environmental, social, and governance seen in other corners of debt markets. In October, a loan by Barings to Northstar Recycling Co. to fund its acquisition by private equity firm Ridgemont Equity Partners was seen as one of the first sustainability-linked financings in the U.S. direct lending space. 

Robert Horn will work as global head of the new Blackstone venture and Simon Hayden will lead activities in Europe, the statement says. Hayden joins the firm from EIG Global Energy Partners. Jean Rogers, recently appointed as Blackstone’s global head of ESG, and Rita Mangalick, head of ESG at Blackstone Credit, will advise on investments and due diligence.

“We believe large scale and flexible capital are essential to funding decarbonization,” said Horn.

© 2022 Bloomberg L.P.

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