Climate Tech 360

This conversation with Kajsa Ryttberg-Wallgren, EVP of Global Growth at H2 Green Steel, explores the milestones achieved by H2 Green Steel in securing funding for its first-of-a-kind Boden plant. The discussion covers topics, such as early financing, partnerships and value chain support, securing site and power allocation, team structure and growth, joint ventures, and the massive fundraising round. The conversation also delves into the debt structure and equipment financing, working with different types of investors, and the key milestones that enabled H2 Green Steel to raise €1.5 billion in equity financing and sign definitive agreements for €4.2 billion in debt. The discussion covers topics such as securing debt from export credit agencies, early consideration of project finance, replicating financing structures for future projects, power purchase agreements and energy sourcing, securing iron procurement, carbon credits as part of the revenue stack, the financing structure for future projects, involvement of strategic partners, scaling the team and organizational structure, challenges in recruiting specialized talent, milestones and de-risking for financing, location as a key factor in bankability, and the importance of timing in success. TakeawaysEarly consideration of project finance and learning from similar projects can help structure financing, from the beginning.The financing structure can be replicated for future projects, but location-specific factors must be considered.Carbon credits can be an important revenue stream for projects with low or no CO2 emissions.The team and organizational structure must evolve as the company scales and moves into different project phases.Recruiting specialized talent from around the world is crucial for success in capital-intensive industries.Milestones and de-risking are important for attracting financing partners.Location plays a significant role in the bankability of projects, considering factors such as renewable energy availability and cost.Timing is a crucial element of success, as market conditions and regulatory frameworks can impact project feasibility. Contact UsGuest: https://www.linkedin.com/in/kajsaryttbergwallgren/Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader/ 

This conversation with Petros Lekkakis explores the concept of 'first of a kind’ (FOAK) in the climate tech space, which refers to hard asset companies developing technologies at the demonstration or pilot scale and seeking to deploy their first commercial minimum viable product. The discussion highlights the importance of FOAK technologies in achieving net-zero targets and the need for collaboration between venture capital and infrastructure investors to bridge the financing gap. Key players in early infrastructure financing include venture capital firms, concessionary capital providers, growth equity investors, strategic players, government agencies, and multilaterals. The conversation also addresses the knowledge gap in commercializing technologies and the role of specialized funds in providing the necessary expertise and capital to support early infrastructure projects. Two case studies, H2 Green Steel and Infinium, highlight the importance of securing long-term contracts and off-takes to de-risk projects and attract capital. Learnings from the financing markets of solar and LNG provide insights into risk mitigation, project structuring, and the importance of standardization. The episode concludes with a startup checklist that includes team building, contract finance, tech demonstration, focus on FOAK projects, pipeline development, strategic interest, and a solid business plan. TakeawaysFirst-of-a-kind refers to hard asset companies developing technologies at the demonstration or pilot scale and seeking to deploy their first commercial MVP.Collaboration between venture capital and infrastructure investors is crucial to bridge the financing gap for first-of-a-kind technologies.Key players in early infrastructure financing include venture capital firms, concessionary capital providers, growth equity investors, strategic players, government agencies, and multilaterals.Specialized funds can provide the necessary expertise and capital to support early infrastructure projects and bridge the knowledge gap in commercializing technologies. Securing long-term contracts and off-takes is crucial for de-risking infrastructure projects and attracting capital.The success of H2 Green Steel and Infinium demonstrates the importance of securing firm off-takes from reputable partners.The early infrastructure model can be applied to other industries, such as agriculture, by forming partnerships with strategic players.Learnings from the solar and LNG markets provide valuable insights into risk mitigation, project structuring, and standardization.A startup checklist for early infrastructure projects includes team building, contract finance, tech demonstration, focus on first-of-a-kind projects, pipeline development, strategic interest, and a solid business plan. Contact UsGuest: https://www.linkedin.com/in/lekkakis/Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader/

This episode explores the investment focus of Syngenta Group Ventures, Syngenta’s venture capital group with Michael Lee.  The conversation covers an overview of what Michael categorizes as Agtech vs Agmarkets, as well as the technologies within those segments that are of particular interest to the company. We discuss exit opportunities for companies in these segments as well as the historical average valuation at exit and whether there is a cap. The episode concludes by discussing the importance of a startup being differentiated in this segment to create value. TakeawaysSyngenta is a multi-billion, Chinese-owned agrochemicals company, with 50,000+ employees. Syngenta Group Ventures does not focus broadly on climate tech but on things that support farmers or farming.Several different technologies are of interest to the group, both in the Agtech and the Agmarkets segments, and they typically avoid investing in companies that require high capex and have high energy needs. The average valuation of the top 10 acquisitions in Agtech over the past decade is approximately 300 million. This would imply, for a 3x return, that the final round valuation would be capped at 100 million (at Series B).   Contact UsGuest: https://www.linkedin.com/in/michael-lee-65084/Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader/

This episode explores the topic of offtake agreements in the context of climate technology projects with Kobi Weinberg. The conversation covers the challenges faced by early-stage companies in transitioning from venture capital funding to debt financing, and the role of offtake agreements in this process. We discuss the basics of offtake agreements, including their definition, key considerations for buyers and lenders, and the variability of terms across different industries. We also discuss the involvement of financiers and governments in de-risking offtake agreements and provide examples of offtake agreements in sustainable aviation fuel, hydrogen, and carbon removals. The episode concludes with a list of resources that startups can use to navigate the process of structuring off-take agreements.  TakeawaysOfftake agreements play a crucial role in the transition from venture capital funding to debt financing for early-stage climate technology projects.Buyers and lenders have different considerations when it comes to offtake agreements, including price, volume, delivery, non-delivery, and quality.Engaging with financiers early in the process can provide valuable guidance and help align the terms of the offtake agreement with the requirements for raising debt financing.Offtake agreements can vary significantly depending on the industry and the specific output being purchased.Governments and nonprofit organizations can play a role in de-risking offtake agreements and supporting the development of climate technology projects. Challenges and risks associated with off-take agreements include pricing uncertainty, credit risk, and termination risk. Mentioned on the podcastCREO’s Introduction to Offtake AgreementsCREO’s Introduction to Risk Transfer Solutions for Climate ProjectsDepartment of EnergySpring Lane CapitalMunich ReElemental AcceleratorPrime CoalitionNew Energy Risk Contact UsGuest: https://www.linkedin.com/in/kobiweinberg/Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader/

Dr. Jonathan Foley discusses the time value of carbon and the importance of taking immediate action on climate change. He emphasizes the need to prioritize solutions that can be deployed now rather than waiting for long-term technological advancements. Dr. Foley highlights the mismatch between investment and carbon reduction, urging investors to align their capital with low-carbon solutions. He also discusses the role of technology in various sectors, including electricity, industry, transportation, buildings, and food and agriculture. Dr. Foley calls for more investment in technologies that monitor and improve supply chains, reduce waste, and promote regenerative agriculture. He discusses the Drawdown Capital Coalition, which aims to provide science briefings and deep dives on important climate topics for impact investors and philanthropists and emphasizes the need to focus on areas that have been neglected or where the hype is ahead of the science, such as deforestation and methane emissions. He concludes by urging the deployment of existing solutions and the importance of time in addressing climate change. TakeawaysThe time value of carbon is similar to the time value of money, emphasizing the importance of taking action on climate change now rather than waiting for future solutions.Investors should prioritize solutions that can be deployed immediately and have a significant impact on carbon reduction.There is a mismatch between investment and carbon reduction, with a disproportionate amount of funding going towards technologies that are not effective in addressing climate change.Technology plays a crucial role in sectors such as electricity, industry, transportation, buildings, and food and agriculture, but it should be focused on solutions that monitor supply chains, reduce waste, and promote regenerative practices. The Drawdown Capital Coalition provides science briefings and deep dives on important climate topics for impact investors and philanthropists.The low-hanging fruit for addressing climate change includes tackling methane leaks, stopping deforestation, and improving efficiency.  Mentioned on the podcastProject Drawdown Capital Coalition Contact UsGuest: https://www.linkedin.com/in/jonathan-foley-182808b9Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader/

This conversation with Hayn Park provides a trader’s perspective on carbon markets and pricing, with a focus on the EU ETS. The discussion covers the current global targets for carbon reduction, the compliance markets and carbon pricing mechanisms, the need for carbon reduction, and the challenges of expanding coverage in the EU ETS. The conversation also explores the role of economic indicators in carbon trading, the liquidity and size of the carbon market, and the day-to-day activities of a carbon trader. Additionally, the conversation touches on other carbon markets and the debate between cap-and-trade and carbon tax approaches. Overall, the conversation highlights the need for more aggressive action to achieve carbon reduction targets. The conversation explores the challenges and potential solutions related to carbon pricing and climate change. It discusses the initial shock of implementing carbon pricing, the viability of new technologies, and the need for global carbon pricing.  TakeawaysCarbon markets and pricing mechanisms play a crucial role in incentivizing carbon reduction and mitigating climate change.The EU ETS is the most developed compliance market, but there are also regional markets in the US, China, and other countries.The carbon market is influenced by economic indicators, market sentiment, and expectations of future policy decisions.Achieving global carbon reduction targets requires more aggressive action and a combination of technological solutions, policy changes, and international cooperation. Implementing carbon pricing may initially cause economic shocks, but it can lead to the viability of new technologies and accelerate the transition to renewable energy sources.Global carbon pricing is necessary to avoid economic imbalances and ensure a level playing field for industries across different countries.Bringing all countries on board with carbon pricing is challenging but essential for effective climate action.Technology plays a crucial role in addressing climate change, and its unpredictable nature makes it a wildcard in the fight against global warming.The conversation acknowledges the challenges and uncertainties but emphasizes the importance of taking action to address climate change. Connect with us:Guest: https://www.linkedin.com/in/haynpark/Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader/

Bailey Morrow from HSBC Innovation Banking discusses the structure and mandate of the climate tech team, as well as the services they provide to startups. She explains the different types of debt financing they offer, including venture debt, equipment financing, and hardware as a service. She highlights the role of HSBC in connecting startups with corporates and the diligence process for debt financing, emphasizing the importance of business metrics and key performance indicators to qualify for funding.TakeawaysHSBC Innovation Banking provides global banking services and lending solutions to climate tech companies.They offer venture debt, equipment financing, and hardware as a service.Project finance is challenging for early-stage companies, and bridging the gap between venture debt and project finance is a key focus.HSBC acts as an ecosystem builder, connecting startups with corporates and facilitating collaboration.Engaging with lenders early in the fundraising process and having a fully funded plan are important for debt financing. Understanding business metrics is crucial for securing funding in climate tech. Connect with us:Email us: info@climatetech360.comWebsite: https://www.climatetech360.comHost: https://www.linkedin.com/in/samiaqaderGuest: https://www.linkedin.com/in/bailey-morrow-b763565/

This conversation with Akshat Rathi explores the concept of climate capitalism and how capitalism can be a driving force for climate change mitigation. It discusses the modification of capitalism to align with climate goals as well as the challenges of partnering with fossil fuel companies in the context of climate hardware startups, the Breakthrough Energy model, enabling factors for climate technologies, the importance of storytelling in climate tech, and Akshat’s current focus as a senior reporter for Bloomberg News. TakeawaysCapitalism can be a powerful tool for addressing climate change when it is modified to align with climate goals.Understanding the limits and regulations imposed by nature is crucial in modifying capitalism for climate change.Founders should carefully consider the potential benefits and drawbacks of partnering with oil and gas companies, taking into account the availability of climate tech funding and the skills needed for their startups.Enabling factors for climate technologies include policy, finance, global diplomacy, shareholder activism, and effective storytelling.Effective storytelling is crucial for climate tech founders to communicate their ideas in a simple, compelling, and memorable way. Mentioned in the podcast:Askhat’s book, Climate Capitalism: https://akshatrathi.com/book/Breakthrough Energy: https://breakthroughenergy.org/ Connect with us:Guest: https://akshatrathi.com/contact/Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqader  

Naomi Sakamoto, Studio Director and Practice Area Leader at Gensler, discusses the firm's net-zero goals and the technologies they need to achieve them. She explores the use of new low-carbon materials and the need for better tools to make informed decisions. Naomi also highlights the importance of collaboration with startups and the potential for technology to revolutionize the industry. She shares examples of Gensler's collaboration with companies working on direct air capture and liquid CO2 storage. Naomi emphasizes the role of storytelling in showcasing a company's environmental values and attracting talent. The conversation explores various themes related to the climate tech industry, talent movement, remote work,  the European climate tech ecosystem, and the need for more conversations and access to corporates. ------------------------------------------------------------------------------------------------TakeawaysGensler aims to achieve a net zero carbon impact portfolio by 2030, but faces challenges in the construction industry's heavy reliance on hard-to-decarbonize materials and processes.Collaboration with startups is crucial in developing innovative solutions for the built environment, and Gensler is actively seeking partnerships to drive change.Technology can play a key role in optimizing building performance, understanding user behavior, and making informed design decisions.There is a need for more conversations and access to corporates, as collaboration and understanding across different players in the climate space are essential for impactful solutions.------------------------------------------------------------------------------------Mentioned in the podcast:Climeworks Orca Project: https://climeworks.com/plant-orcaSoletair Power: https://www.soletairpower.fi/Energy Dome: https://energydome.com/ ------------------------------------------------------------------------------------Connect with us:Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqaderGuest: https://www.linkedin.com/in/naomi-sakamoto-aia-840a696b/ 

This conversation with Zeev Krieger, Partner at Third Sphere and Managing Partner at Third Sphere Credit, explores the topic of financing climate hardware companies. Various financing options for climate hardware companies are explored, including equipment leasing, corporate loans, venture debt, project finance, and asset-based financing. The episode concludes with examples of how companies in the portfolio of Third Sphere have utilized different financing strategies. It delves into the significance of granularity in financial analysis and the transition to off-balance sheet structures. --------------------------------------------TakeawaysFinancing climate hardware companies is a key concern for investors and founders in the industry.Different financing options for climate hardware companies include equipment leasing, corporate loans, venture debt, project finance, and asset-based financing.Understanding the specific needs and complexities of a company's business model is crucial when choosing the right financing strategy. Lending against specific assets, such as smart radiator covers, requires a thorough understanding of the asset's performance and value.Building a borrowing base is crucial for startups to validate their assets and demonstrate their ability to repay loans.Granularity in financial analysis, including understanding working capital cycles and asset performance, is essential for risk management and loan structuring.--------------------------------------Definitions:Equipment finance: https://corporatefinanceinstitute.com/resources/commercial-lending/equipment-finance/Asset-backed lending: https://www.investopedia.com/terms/a/assetbasedlending.aspRevolver: http://tinyurl.com/revolverdefinitionProject finance: https://www.investopedia.com/terms/p/projectfinance.asp--------------------------------------Connect with us:Email us: info@climatetech360.comHost: https://www.linkedin.com/in/samiaqaderGuest: https://www.linkedin.com/in/davidzeev/Third Sphere: https://thirdsphere.com/