Goldman Sachs targets $3bn for Climate Credit Fund to drive low-carbon transition

The fund will focus on lending to businesses in sectors such as clean energy and sustainable transportation, with an emphasis on North America and Europe.

GSAM has committed $150m of its own capital to the fund, which will primarily target senior lending opportunities but retain the flexibility to provide junior debt when needed. The fund aims to generate net returns of 8% to 10% on an unlevered basis, with levered investments expected to deliver around 13%.

The initiative is part of GSAM’s private credit platform, which manages $145bn in assets. It follows Goldman’s broader push into sustainable investing, including the $1.6bn raised for an ESG-focused private equity fund in 2023.

Despite past policy rollbacks under former US President Donald Trump, analysts believe the transition to a lower-carbon economy remains intact. Citigroup analysts and renewable energy investor Schroders Greencoat anticipate continued investment in clean energy, with limited disruption to renewable financing.

Goldman’s latest move underscores growing investor interest in sustainable credit strategies, as private capital increasingly plays a role in funding the energy transition.

Source: Private Equity Wire

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