The first of its kind in China, the fund seeks to promote investment in carbon-free technologies and fast-track their applications amid China's move toward meeting its 'Dual Carbon Goals'
IDG Capital joined hands with Hong Kong and China Gas Group (0003.HK) (Towngas) today to launch the first carbon-free technology fund in China. The fund has a total worth of CNY 10 billion (USD 1.60 billion) and the first close has raised CNY 5 billion.
The fund counts local governments, financial and strategic investors among its backers.
The two companies said in a joint announcement that they will forge strategic partnerships and leverage the Hong Kong gas supplier's rich business lines to enable the application of low-carbon products and innovative technologies from portfolio companies.
The move aligns with China's "Dual-Carbon Goals," an overriding environmental initiative that pledges to cap the nation's carbon emissions by 2030 and achieve carbon neutrality by 2060.
The initial 5-billion yuan fund will primarily be invested in carbon-free innovations such as solar and wind energy, power battery, energy storage, smart grid, hydrogen power, carbon trading and management.
The fund, headquartered in Changzhou of eastern China's Jiangsu Province, a city best known for its clean energy clusters, will help advance its industry and zero-carbon development.
Through "better coordination and synergies" with local governments, the fund places a high premium on searching for startups that are able to solve bottlenecks in carbon neutrality technology.
Under the overarching goals of promoting renewable energies, electrification of energy and intelligent power systems, the fund will employ multiple business scenarios to accelerate the product iteration and business expansion of target firms.
"We deeply know that in the energy field, innovative technology and products can evolve and be adopted only with feedback generated through application," said Fang Jun, a partner at IDG Capital, which has invested in clean energies for 20 years and spans business areas including photovoltaic industry, electric vehicles, power storage, among others.
"Towngas hopes that through investing in the IDG-led carbon-free fund and leveraging our mutual advantages, we can improve our own energy technological innovation ecosystem," said Alan Chan, chief investment officer of the Hong Kong energy supplier. It has 118 so-called "smart power projects" currently in service across 21 provinces, autonomous regions and municipalities within China.