The Canada Growth Fund (CGF), the federal government’s clean energy investment fund, will commit up to $50 million CAD to Calgary-based private equity firm Longbow Capital for its second Energy Transition Fund.
The commitment comes in addition to Longbow’s initial $150-million CAD close for the fund in November, backed by “institutional and family office investors” and returning anchor investors TD Bank Group, Caterpillar Ventures, and the federally funded BDC Capital. CGF will invest a percentage of the fund until its total commitment has reached a maximum of $50 million CAD, a CGF spokesperson told BetaKit in an email statement.
CGF is a $15-billion fund created to attract private capital to the Canadian cleantech market.
Longbow said the fund, which is targeting $250 million CAD, has a mandate to invest in North American businesses that are “expected to benefit from the momentum behind the energy transition,” with a focus on companies that help lower carbon emissions through “efficient and cost effective solutions.”
The CGF is a $15-billion fund first introduced in the federal government’s 2022 budget aimed at attracting private capital to the Canadian cleantech market. The fund is managed by a subsidiary of Canadian public sector pension fund PSP Investments, which is led by president and CEO Yannick Beaudoin. CGF made its first-ever investment in October 2023, when it topped up Calgary-based cleantech startup Eavor’s Series B round with $90 million.
In a statement, Beaudoin said CGF’s commitment to Longbow’s second Energy Transition Fund is its 10th investment to date and supports its mandate to provide additional capital that supports the growth of Canadian cleantech companies and managers.
“With their expertise in the energy sector and pipeline of investment opportunities, we look forward to an ongoing partnership with the investment team at Longbow,” Beaudoin said.
RELATED: Longbow Capital completes $150-million initial close of second Energy Transition Fund
Founded in 1997, Longbow Capital claims it has approximately $1.5 billion in assets under management across the energy and power sector, including low-carbon energy solutions, energy and power production, infrastructure, services, and technology. Longbow’s first Energy Transition Fund raised a total of $181 million in 2022.
The firm has backed Canadian cleantech firms such as Clir Renewables and Arcus Power, and was recognized with the 2024 PE Deal of the Year at last year’s CVCA awards for its big exit from hydrogen and natural gas distributor Certarus. Its second fund has completed one disclosed investment to date, the $210-million equity round of Houston, Texas-based energy management platform VoltaGrid in March 2024.
Feature image courtesy Longbow Capital.