APOLLO Global Management and Standard Chartered have formed a partnership to finance infrastructure deals, renewable energy and the low-carbon transition.
Apollo Clean Transition Capital, the firm’s sustainable investing platform, and the London-listed bank have committed to jointly invest up to US$3 billion, primarily through providing debt, according to a statement from Apollo seen by Bloomberg.
It’s the latest sign that private capital giants, including the likes of Blackstone and KKR & Co, are looking to play central roles in financing the energy transition. The move is the latest in a series of partnerships Apollo has struck with banks, including BNP Paribas and Citigroup, in different areas of finance.
Apollo has already deployed over US$40 billion in energy transition and climate-related investments, including deals for Wolfspeed, the largest producer of silicon carbide technology, and renewable gas producer Opal Fuels.
At its investor day last year, Apollo said that over the next 10 years financing the energy transition, power and utilities and digital infrastructure would require at least US$75 trillion.
“The global industrial renaissance is creating unprecedented capital demands across next-gen infrastructure, sustainable power and other transition assets,” Jim Zelter, co-president of Apollo, said in the statement.
The energy transition will involve a rewiring of energy systems towards low-carbon sources, alongside a retooling of everything from food production to transportation and industrial processes to cut emissions. Described by BlackRock as a “mega force,” the transition comes with a price tag well north of US$100 trillion and has already spurred record investment flows.
Private markets are emerging as a major player in energy-transition investing. Proponents have said private markets are better suited for shepherding the multi-year corporate transformations required because they’re not plagued by the public market’s fixation on quarterly earnings and short-term performance.
Sourcing deals for the Apollo-StanChart partnership will mostly come from Apterra, the Apollo-owned platform that specialises in originating infrastructure debt, the statement said. As part of the deal, StanChart has acquired a minority stake in the platform, and is providing a senior secured credit line to ACT Capital to fund project finance and infra loans. BLOOMBERG
