Sustainable infra investment firm Generate capital raises $2 billion

San-Francisco-based green infrastructure investment company Generate Capital raised $2 billion in its latest funding exercise backed by pension funds from Australia, Sweden, and the U.K.

With the rising interest of Wall Street investors in emissions-reducing investments, the new funding will bring the company's balance sheet to around $10 billion, following a $1 billion raise in February 2020.

The capital raise was led by AustralianSuper and QIC. Generate’s existing investors including Sweden’s AP2, Railways Pension of the UK, and the Wellcome Trust also participated in the funding exercise. The firm added new institutions to its investor slate, including Harbert Management Corporation, Aware Super, and CBRE Caledon, among others.

Generate’s investors buy permanent stakes of the company itself. The long-term capital received is used to invest in infrastructure companies it operates and owns. Despite the permanent capital structure, the firm issues dividends and offers investors the opportunity to sell off their investments annually. 

The private investment firm invests in waste management, transportation, and sustainable energy. It intends to invest more in agriculture, water, and smart cities, which includes investing in digital access and microgrids.

The company partnered with Starbucks to develop community solar projects in New York that provide solar power to local shops. A collaboration with the public school system of Hillsborough County in Tampa, Florida, allowed the district to install better HVAC and building management systems, and replace lights with energy-efficient bulbs.

The company started with a funding of $50 million and around 50 workers. It is now bound to open offices in New York, as well as London, to expand its investments in Europe, and has 140 employees today. 

(With inputs from CNBC)

Picture Credits: Shutterstock