Japanese multinational automobile manufacturer Mitsubishi is launching one of Japan’s largest decarbonisation funds with a US$1bn investment plan to support emerging technology startups.
The launch will be one of the largest decarbonisation funds in Japan and will be supported by the country’s largest bank, MUFG Bank and other organisations.
The investment fund is planning to allocate $1bn (£800 million) towards budding technology startup companies, specifically in the areas of floating offshore wind turbines and sustainable aviation fuel (SAF).
The main focus of the fund will be on European and US startups that are at the forefront of these sectors. In addition, the trading house aims to foster partnerships between these tech startups and Japanese or other Asian companies through its global business network, with the ultimate goal of advancing decarbonisation efforts among these companies.
Investing in start-ups
In its partnership with MUFG bank and South Korean private equity fund Pavilion Private Equity, Mitsubishi will establish a management company for the Marunouchi Climate Tech Growth Fund.
It is estimated that the fund will invest in approximately 20 startups by April 2029, with individual investments ranging between $20m to $100m. The startups will mainly be projects that are yet to be commercialised.
Mitsubishi will provide the fund with several hundred million dollars of investment, expecting the fund to increase to $1bn by April 2024. If this milestone is achieved, it will make the fund one of the largest in Japan led by an operating company.
It is also estimated that an average annual investment of $2tn will be required from 2022 to 2025, in order to achieve net zero CO2 emissions by 2050. This will rise by $4tn each year from 2026 to 2030.
Mitsubishi will provide opportunities for collaboration with other investing companies. The automobile manufacturer will also invest in floating offshore wind turbines and technologies that directly capture carbon dioxide from the air.
Mitsubishi intends to allocate ¥2tn (US$15bn) towards decarbonisation initiatives by 2030. In 2022, the company invested US$100mn in Breakthrough Energy Catalyst, a decarbonisation fund established by Microsoft co-founder Bill Gates, to support this objective.
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