Private-equity giant Carlyle Group Inc. is launching a company to develop renewable-power-generation and storage projects in a push to reorient its energy business toward sustainable investments.
Funds Carlyle operates will inject as much as $700 million in the new venture, Copia Power, enabling it to arrange projects worth over $6 billion, according to Pooja Goyal, Carlyle’s co-head of infrastructure and head of renewable and sustainable energy. Copia will focus on developing large-scale solar generation projects and battery facilities to store power and distribute it after sunset.
Carlyle has a long history of debt and equity investments in fossil fuels, but now the firm—and competitors like Blackstone Group Inc. and KKR & Co.—is pivoting to cleaner technologies. The money manager in April disclosed $22 billion of private-equity investments in traditional and renewable energy, representing 16% of total private-equity assets under management.
The initiative is part of a race on Wall Street, as large investment firms bankroll competing power projects amid a national pushto revamp electrical infrastructure. The shift comes as investors clamor for environmentally friendly financial products and as national infrastructure initiatives offer potential opportunities to private-equity firms.
“There is a recognition by these companies that this is a new asset class and that there’s an enormous amount of development prospects out there,” said Jason Burwen, interim chief executive of the U.S. Energy Storage Association trade group. “It’s a good time to be a capital provider.”