Brookfield Asset Management Ltd. aims to raise more than $15 billion to invest in low-carbon technologies, including the use of green hydrogen to clean up pollution from the steel sector.
The private equity giant will this week launch the Brookfield Global Transition Fund II, a larger iteration of its previous fund focused on decarbonization and clean energy, Natalie Adomait, managing partner of renewable energy and transition, said in an interview. It will invest in emerging technologies like green hydrogen and carbon capture, alongside more established investments in wind, solar and batteries.
“What we like are real assets with strong, visible cashflows,” said Adomait, who was in Australia last week talking with major institutional investors. She added that green hydrogen manufacturing — which requires renewable energy and electrolyzers to split water atoms into hydrogen and oxygen — could fit those criteria.
Brookfield has sought to tap global demand to invest in the transition away from fossil fuels, including a multibillion dollar deal to buy an Australian utility and invest in the nation’s booming renewable energy sector. Steelmakers, which currently depend on coal and account for about 7% of global emissions, are promising customers for hydrogen, according to Adomait.
“When we think about partnering with a steel company, for example, we would look at how we can help them by building a hydrogen electrolyzer that can be under a long-term off-take arrangement,” she said.
The most advanced emission-free alternatives use hydrogen — a carbon-free combustible fuel — in place of coal, but are capital intensive and untested at scale. This presents an opportunity for deep-pocketed investors with the right expertise, London-based Adomait said.
Steelmakers would “get the benefit of having a much more competitive product in the market place” while putting “zero upfront capital in to actually achieve that — that’s the secret sauce,” she said. Brookfield is also looking at capturing, storing and using carbon emissions from blast furnaces, which currently produce around 70% of the world’s steel.
Brookfield has about $800 billion of assets under management across infrastructure, private equity and real estate, according to its website. In recent years, the group has made renewables and the energy transition an area of expertise under former Bank of England governor, Mark Carney.
In March, Brookfield led a consortium that agreed to acquire Australian utility Origin Energy Ltd., and plans to invest A$20 billion ($13.3 billion) over the next decade to add clean energy generation.
Adomait said the Origin deal was “straight down the fairway” of the sort of deals Brookfield was looking for. She said North America, Europe and Australia were favored jurisdictions, and that India was also a promising investment destination for manufacturing of clean technologies like batteries.
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