CPE News (12.14.2022) – Fondaction and Priori-T Capital have launched Inlandsis II – Fonds de financement de projets de réduction de GES par contrat carbone, S.E.C., with a $115 million initial close.
Limited partners (LPs) include the Lucie and André Chagnon Foundation, Sabius Private Institutional Mandate (Dalpé Wealth Partners), Société Financière Bourgie, HEC Montréal, Horizon Capital Holdings, Capital Benoit and Genus Capital Management, and Fondaction and Priori-T Capital
With a fundraising target of $160 million, Inlandsis II is one of the largest funds to finance GHG reduction projects in Canada. The fund’s capital will be deployed in projects that generate credits on North American compliance and voluntary carbon markets.
The fund will be managed by Fondaction Asset Management (FAM), a wholly owned fund management platform established by Fondaction recently, and Priori-T Capital.
The Inlandsis Fund was established by Fondaction and Coop Carbone in 2017. The Fund was initially capitalized exclusively by Fondaction. In July 2019, Fonds d’investissements LCC, s.e.c., joined as an investor, and it’s affiliate, Prior-T Capital, also became a partner in 2021.
For the purpose of managing the Inlandsis I and II funds, Fondaction and Priori-T Capital formed a new joint venture, Inlandsis ManagementCo.
photo credit: Fonds Inlandsis
Inlandsis II Fund: Fondaction Asset Management and Priori-T Capital are mobilizing over $115 million to fight climate change and protect natural capital
MONTRÉAL, Dec. 14, 2022 /CNW Telbec/ – Fondaction Asset Management (FAM), Priori-T Capital and their partners are launching the Inlandsis II Fund, one of the largest funds to finance GHG reduction projects in Canada. The fund will be managed by FAM, Fondaction’s new innovative fund management platform, and its partner, Priori-T Capital. The fund’s capital will be deployed in projects that generate credits on North American compliance and voluntary carbon markets.
Its first closing reached $115 million thanks to the participation of over thirty investors, including Fondaction, Priori-T Capital, the Lucie and André Chagnon Foundation, Sabius Private Institutional Mandate (Dalpé Wealth Partners), Société Financière Bourgie, HEC Montréal, Horizon Capital Holdings, Capital Benoit and Genus Capital Management.
While COP15 is underway in Montréal, this announcement, which unites several North American financiers, speaks of the relevance of mobilizing capital in climate change, nature conservation and biodiversity.
Preserving existing carbon sinks and protecting biodiversity
The fight against climate change and nature conservation are intricately linked; the natural environment provides us with opportunities to reduce our carbon footprint, such as carbon sequestration. When a forest is destroyed, regardless of the cause, it takes decades to recover the lost carbon storage capacity. The impacts on local biodiversity can be major and even irreversible.
“In addition to financing corrective measures throughout industry to reduce GHG emissions, the Inlandsis II Fund will also deploy its capital on voluntary markets to ensure that efforts toward biodiversity and natural capital protection are more sustained as compared to its predecessor,” stated Stéphan Morency, Vice-President and Chief Investment Officer at Fondaction and Chairman of FAM’s Board of Directors. In total, the Fund aims to reduce GHG emissions by more than 24 million tonnes over a ten-year period.
Toward a capitalization of $160 million
The magnitude of the initiatives and projects that need to be delivered to achieve the GHG reduction objectives will require enormous amounts of capital. FAM and Priori-T Capital are therefore anticipating a second closing in the coming months that would increase the Inlandsis II Fund’s capital up to $160 million.
According to Marc-André Binette, Deputy Chief Investment Officer at Fondaction, “fighting climate change through forest preservation creates greater biodiversity, as forests often provide refuge to threatened species, but also more economic value for the forests and the communities that rely on them. This is a crucial component for this type of structuring investment, and it is why Fondaction acts as the Fund’s lead investor, having injected $24 million into Inlandsis I and another $30 million into Inlandsis II with the aim to create an upward snowball effect.”
“Inlandsis is one of the first investment funds worldwide to generate revenue with the carbon credits it makes available through the projects it supports. In addition to generating competitive returns for its investors, the Inlandsis Fund innovates by investing in several types of GHG reduction projects, including the reduction of methane emissions in agriculture and in abandoned coal mines,” stated Jean-François Babin, CEO and cofounder of Priori-T Capital.
“For the purposes of maintaining our leadership position and contributing to the protection of the environment, it was clear to us that creating the Inlandsis II Fund would give us crucial leverage in the impact financing ecosystem,” said Vital Proulx, Chairman of the Board of Directors and cofounder of Priori-T Capital.
A Quebec centre of excellence in carbon finance exporting to the entire North American market
The carbon markets have grown over the last two years, namely in response to the numerous net zero commitments that the majority of large companies and financial institutions have made worldwide. Many of these commitments will be met due in part to the purchase of carbon credits.
The Inlandsis II Fund was developed with these issues at the centre of its strategy. For David Moffat, Managing Director of the Inlandsis Fund, “the Inlandsis I Fund created a pioneering centre of climate finance expertise in Quebec that has had a major impact on North American markets. Inlandsis II further builds this expertise and significantly expands its impact.”
In 2019, Fondaction received the EnviroLys Award in the Supporting the Green Economy category for having created the Inlandsis Fund two years earlier. Inlandsis I set itself apart from the rest by its involvement in the area of agriculture and in the installation of biodigesters on livestock farms, by the capture of methane in abandoned mines and gas sites, by the CO2 sequestration achieved through a large-scale forestry development and, more recently, by the permanent conservation of an old-growth forest.
About Fondaction Asset Management (FAM)
Fondaction Asset Management is an independent subsidiary of Fondaction, a forerunner in sustainable finance for the past 25 years in Canada. FAM is dedicated to investments that generate a positive impact and develop innovative and competitive investment solutions that catalyze the economy’s transformation toward a sustainable model.
The management platform namely offers local and international investors the means to meet their commitments in capital mobilization, which began at COP21, in Paris in 2015, and reached its peak in Glasgow. FAM’s objective is to combine in one fell swoop competitive financial returns for its clients and a significant contribution to achieving the SDGs for the generations to come.
FAM currently manages four innovative and structuring investment funds. Initiated by Fondaction, these funds primarily invest in carbon projects (Inlandsis I and Inlandsis II), energy efficiency (SOFIAC) and circular economy (Fonds économie circulaire). For more information, go to https://www.fondactionassetmanagement.ca.
About Priori-T Capital
Priori-T Capital develops alternative investment solutions aimed at fighting climate change. The company builds on the experience of its managers who, since 2017, have made private investments in partnership with Fondaction in various climate change projects, such as the Inlandsis I Fund.
Today, it aims to create an ecosystem that provides investors with investment opportunities that are carbon market driven and offer entrepreneurs access to capital to build a greener economy. For more information: https://www.prioritcapital.com/home
Created in 2017, the Inlandsis Fund has been supported since the beginning by Fondaction and Priori-T Capital, both based in Montréal. For the purpose of managing the Inlandsis I and II funds, they created a new joint venture, Inlandsis ManagementCo.
Inlandsis is the only Canadian fund, and one of the few worldwide, to exclusively finance carbon emission reductions. It offers a unique project financing solution that supplies initial capital in exchange for carbon credits — an innovation that is crucial to bringing numerous carbon emission reduction projects to fruition.
The Inlandsis I Fund is also active on the clean fuel markets, focusing primarily on the Low Carbon Fuel Standard (LCFS), a program California created to reduce its GHG emissions. Its growing portfolio includes over forty projects on the California-Quebec carbon market, California’s LCFS program, the Alberta carbon market and the voluntary market. For more information, go to https://fondsinlandsis.com.
A forerunner for the past 25 years, Fondaction is the investment fund for those who are mobilizing for the positive transformation of Quebec’s economy, making it more productive, equitable, inclusive and green.
As a labour-sponsored fund, Fondaction represents tens of thousands of savers and hundreds of companies committed to driving Quebec’s progress. It manages net assets of more than 3.11 billion dollars invested in hundreds of businesses and on the financial markets, favouring investments that generate positive economic, social and environmental spinoffs in addition to financial return. Fondaction helps create and maintain jobs and reduce inequalities while contributing to the fight against climate change. For more information, go to fondaction.com or our LinkedIn page.
For further information: Stéphanie Dunglas, Adviser, Communications et Public Relations, Cell phone: 514-969-8828, Email: firstname.lastname@example.org