Canadian Pension Fund Establishes Energy Transition Fund

• AIMCo has unveiled a new CAD 1 billion energy transition fund, calling it ETOP 
• It includes investments from many of its clients that get exposure to a variety of energy transition opportunities 
• Low-carbon renewable energy production and related technologies and renewable fuels are among the areas of investment 

Canadian institutional investment manager and pension fund Alberta Investment Management Corporation (AIMCo) has launched a CAD 1 billion ($745 million) fund to invest in the global energy transition and decarbonization sectors. 

The new fund, called Energy Transition Opportunities Pool (ETOP), will focus on investment opportunities in low-carbon renewable energy production and related technologies. Electrification, storage and energy efficiency; industrial decarbonization, carbon capture and sequestration along with sustainable solutions and renewable fuels are the other investment areas for the fund. 

AIMCo says this initial CAD 1 billion represents new capital to which many of its clients have allocated funds, without disclosing the names. It will offer them exposure to a variety of energy transition opportunities, it added. 

Investments made through ETOP will be in addition to the pension fund's other climate-related investments across asset classes. AIMCo manages over CAD 158 billion of assets and invests globally on behalf of pension, endowment, insurance and government funds in Alberta. 

"Our climate approach provides important transparency around how we consider climate in our investments and how we will, over the long run, help reduce emissions," said AIMCo Chief Investment Officer Marlene Puffer. 

AIMCo is one among the several pension managers of Canada with growing investments in energy transition, including renewable energy. Ontario Teachers' Pension Plan is another Canadian pension fund that's active in the space. It recently launched an Infrastructure Investment Trust (InvIT) with INR 22.63 billion offer size with India's Mahindra Group for the Indian renewable energy sector (see Canadian Pension Fund Invests In Indian RE Sector). 

Canada Pension Plan Investment Board (CPPIB) plans to invest at least CAD 130 billion in green and transition assets by 2030, increasing its investments from CAD 66 billion in FY 2022. It is an investor in wind and solar companies like Octopus Energy and Cordelio Power.  

Yet another big-wig Caisse de dépôt et placement du Québec (CDPQ) had renewable energy accounting for 18% of its investments as of December 31, 2022. One of its investments is wind and solar developer Invenergy in which it is a majority stakeholder.