Deals

KKR takes stake in carbon markets investor GreenCollar

The private equity firm has made the investment through its $1.3bn Global Impact Fund, which closed in February 2020.

-

Private equity firm KKR has made an investment of an undisclosed size in Australian environmental markets investor GreenCollar.

Founded in 2011, GreenCollar was an early participant in Australia’s Carbon Farming Initiative and works with landowners to identify and develop carbon projects, including forest protection and large-scale land restoration.

The firm then facilitates the sale of the resulting credits from operational projects to private and public organizations that seek to mitigate their own environmental impact.

It is also the largest participant in the Australian government’s Emission Reduction Fund, having secured contracts to supply approximately 65 million Australian Carbon Credit Units.

KKR said in a statement that its investment would help advance GreenCollar’s ability “to provide commercial solutions to climate change-related challenges faced by governments, corporates and individuals.” It did not disclose any of the terms of the transaction and declined to comment beyond the statement.

The firm has made the investment through its KKR Global Impact Fund, a $1.3 billion vehicle that closed in February 2020 with a mandate to invest in companies whose core business models provide opportunities to develop commercial solutions to an environmental or social challenge.

In particular, the fund is focused on companies in the “lower middle market that contribute measurable progress toward one or more of the United Nations Sustainable Development Goals.”

George Aitken, a director on KKR’s private equity team in Australia, said in a statement: “The company’s entrepreneurial and collaborative culture has made them the clear leader in the Australian carbon market. Working together, we can help GreenCollar accelerate innovation in carbon markets and also support the development of other market-based solutions to tackle environmental issues such as water quality, plastics and biodiversity.”

GreenCollar co-founder and CEO James Schultz said KKR’s investment signaled “the next part of our evolution as we look to grow GreenCollar into a global business.”