Temasek and BlackRock raise billions for environmental companies

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In early April, the world’s largest asset manager, BlackRock (AUM $ 8.67 trillion) and Singapore’s Temasek Holdings, announced that they would join forces again, setting up new funds to invest in startups. state-of-the-art environmentalists on their way to market marketing.

The decarbonization partners, as the joint venture is called, will set up various funds with the initial injection of US $ 600 million (US $ 795 million) by both companies, raising additional capital from external investors to achieve the $ 1 billion for its first fund.

Finally, they aim to reach the projected US $ 5 billion (US $ 6.6 billion) or more in assets managed in the coming years.

This makes the news excellent for all advanced companies looking for significant funding to market their ideas, products or services, contributing to the economy of net zero emissions.

A look at the impact it can have on Singapore

First, it strengthens Singapore’s position on the green investment map, as the public company is directly involved in supporting the commercialization of advanced environmental projects.

Second, it is great news for all Southeast Asian countries, as Temasek’s proximity and understanding of the area may open up avenues for regional companies, which would normally be less accessible as Western investors they may prefer to keep up with what they feel comfortable in Europe and America. .

Image credit: Munshi Ahmed via Bloomberg

Third, it can be a profitable investment for Temasek, whose assets are part of Singapore’s vast national reserves, as target annualized returns for a decade or more can reach 20% per annum. These are the bold goals set along with BlackRock (Temasek is one of the most important investors as well).

Finally, Temasek, which represents government interests and participates in major local businesses, has a direct interest in promoting environmentally friendly solutions, which could see its debut on Singapore soil. This could have an impact on both the companies that own Temasek and the Singapore industry.

You can find a clue as to how Dilhan Pillay, the new CEO of Temasek, who took over from Ho Ching in October 2021, and BlackRock CEO Larry Fink highlighted his interest. to develop solutions that would allow replacement of fossil fuels by hydrogen.

Singapore airlines
Image credit: Edgar Su via Reuters

This is of direct interest to Singapore Airlines (of which Temasek has a significant stake), as they are looking for a long-term replacement for aircraft fuel.

At the same time, hydrogen shows potential as a substitute for oil in shipping, with the announcement of Royal Dutch Shell and Singapore SembCorp 12-month trials for fuel cells mounted on a ro-ro boat, which will begin next year.

Since the city-state is one of the largest petrochemical centers in the world, it is also perfectly positioned to be at the forefront of the transition from oil and gas to hydrogen, which has its industrial base on the island. Jurong will probably reap benefits.

A potential to help generate returns in Singapore

In other words, Temasek is investing in companies whose solutions have direct applications in support of Singapore’s major industries – air and sea transport, as well as petrochemicals – which are today the foundations of the local economy but which are destined to be finally replaced with new solutions.

It is therefore in the fundamental national interest for Singapore to be at the forefront of this change, able to maintain its advantageous position built in previous decades.

The city-state has already participated in this prolonged evolution on many fronts.

shipping to Singapore
Image credit: Riviera Maritime Media

About a decade ago abandoned oil in favor of cleaner natural gas for local electricity generation. Today, it uses its position as the world’s leading bunker port to deploy LNG shipping solutions for the new generations of ships running on cleaner fuel.

In the future, this experiment, and at least some of the infrastructure used for cryogenic LNG, can be used to adapt to applications that use liquefied hydrogen, especially because the main source of gas today is traditional fossil fuels. that Singapore is highly competent and well equipped to handle.

Former Canadian ice hockey player Wayne Gretzky used to recommend skating where the puck was going, not where it has been. With this in mind, Temasek’s moves show great potential not only to generate substantial returns for the company, but for Singapore as a whole.

Featured Image Credit: Munshi Ahmed via Bloomberg / Citywire Selector





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