Caisse de dépôt et placement du Québec (CDPQ) and Lightsource BP will make a $193 million debt investment to finance myriad solar assets.
Lightsource, which specializes in solar energy investments, will manage the account set to hold more than 100 solar projects globally. The projects will total 700 megawatts of sun power, which the pension fund will finance via a loan to the company.
The project is part of the $229.6 billion Canadian pension plan’s climate objectives. CDPQ wants to achieve more low-carbon investments to help reach the Paris Accord’s green world goals. Solar projects are one of the newer asset classes.
CDPQ in March increased its 2020 low-carbon allocation target to C$32 billion from C$26 billion worth of assets under management. The fund wants to cut its carbon footprint by 25% per dollar invested by 2025.
“Climate Change is an immediate challenge that is already impacting businesses, as well as a long-term trend that changes the balance between risks and opportunities in many sectors,” Jérôme Marquis’s, a CDPQ managing director of fixed income, told CIO. “It is part of our job to look carefully at the opportunities that generates the transition to a low carbon economy. This investment reflects our capacity to capture these opportunities that are also well aligned with our overall investment strategy as a long-term investor.”
Lightsource has more than 2 gigawatts of solar power projects under management. It hopes to bring that number to 10 gigawatts by 2024.
CDPQ’s asset mix is divided across three portfolios: equities (48%), fixed income (30.4%), and real assets (19.7%).