Follow the Money
The July 2025 Edition
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Hey there! 👋
Skander here.
Back from a short summer break. I spent the last three weeks crossing China by high-speed rail and trying self-driving rides, while Marco worked with our newest cohort, set up the upcoming challenges, and hosted sessions in the community and Open Climate.
As you know China is pivotal for our climate solutions and I learned a lot on the trip and will share more in the coming weeks. If there is a topic you want me to cover, reply and tell me.
Welcome to the second edition of “Follow the Money”: a monthly briefing exploring the capital flows shaping the climate transition.
Next week we’ll break down the latest financing rounds and dig into what made them happen… but first, a quick recap of the recent highlights.
Join our community discussion next week, we’d love to hear your take.
Over to you, Jarek!
But first: Who is Jarek?
Jarek Dmowski is a global transformation leader who partners with high-growth companies with positive climate impact. He combines industry and climate finance expertise with a strong track record of driving growth—across PE/VC-backed scaleups, ABN AMRO, and BCG.
He scaled a data-driven technology company ~2.5x to ~$25M in revenue and led post-merger integrations that enabled ~6x accelerated growth. At a global financial institution, he spearheaded a $2B capital reallocation toward new energy and mobility. He also developed a comprehensive climate plan that translated the Paris Agreement into actionable targets across sectors and established a $250M program to drive efficiency gains and reduce emissions at an energy utility.
Jarek is passionate about how the climate transition reshapes economies and business models, creating significant opportunities for multi-country growth and impact.
Despite ongoing challenges in 2025, global climate finance remains strong, with several high-scale and high-profile announcements. HSBC committed up to $1 trillion in sustainable finance by 2030, while Japan's $1.7 trillion Government Pension Investment Fund is using its passive capital to raise ESG standards across markets. A landmark deal between Google and Brookfield will see Google procure up to 3 GW of carbon-free power from Brookfield's U.S. hydro assets.
The EU is proposing a €410 billion fund to de-risk grid investments, while China is backing a $168 billion state-led hydropower project to boost energy security. Multilateral institutions also play a growing role: the Green Climate Fund approved a record $1.2 billion for 17 new projects, bringing its total portfolio to 314 projects with $18 billion in GCF funding and $67 billion including co-financing.
Despite the summer slowdown, July saw robust activity with 109 deals totaling approximately US$6.7 billion, surpassing June's numbers. Let's explore:
Where did money flow in July 2025?
Explanation of the approach and source data: The investment list was developed based on disclosures, newsletter monitoring and review of climate news. Although not exhaustive, 109 climate-related investment deals were tracked—amounting to roughly US $6.7 billion, covering all continents and different life stages of companies and development finance programs. Data skews toward the early stage companies and investments. We are continuously working to expand the data sources and coverage of investments.
So, where did the money flow in July 2025?
Strong activity in the Energy, Industrial, and Transportation (outside of North America) sectors, with less investment in the Buildings space.
Climate Data continues to attract some investments, while Adaptation/Resilience investments are largely driven by Development Finance Institutions (DFIs) in Asia and the Rest of the World.
AI's Influence: Sixteen AI-driven solutions secured funding, highlighting the growing role of artificial intelligence in climate solutions.
Venture capital financing (Series Seed to B) was the most common, with 61 transactions. The remaining deals were spread across debt/project finance, grants, development finance, and blended finance. The top five deals were debt facilities, totaling approximately $3.3 billion.
The average transaction size was around $61 million. The largest deals included a $1.6 billion debt facility for Germany's NeXtWind, a $550 million public-private partnership for MP Materials for rare earth minerals, and a $740 million deal for France's Electra for EV charging infrastructure. Several smaller-scale seed rounds and grants, particularly in Australia, were also noted.
Geographically:
Europe led with 42 deals (~US$3.4 billion), followed by North America with 31 deals (~US$2.2 billion).
Asia is emerging in our monthly review as a significant player with 15 deals (~US$0.8 billion), with smaller-scale activities across the rest of the world.
Are money following our expectations for H2’2025 (refer to Follow the Money - June 2025):
“One Big Beautiful Bill” 🌫️
The hypothesis that U.S. tax credit phase-outs would shift capital from mature renewables to next-gen baseload tech (e.g., geothermal, nuclear) is not yet visible. Recurrent Energy secured $260 million for its 94 MW Blue Moon Solar Project in Kentucky, showing continued appetite for solar. There were no new nuclear or geothermal-focused deals in July.
Tailwinds for Baseload Clean Tech 🌫️
Rising global energy demand—especially from AI data centers—supports the thesis, but investment is flowing into enabling tech (energy storage or industrial decarbonization) rather than new baseload projects themselves. The earlier-mentioned deal between Google and Brookfield in the US hydro assets fits this theme.
Surge in Grid Tech & Energy Storage ✅✅ (storage) / 🌫️ (grid scale)
Energy storage saw strong capital inflows with deals (ESS, Lightshift, and Lyten). Grid investments were smaller and focused on modernization "brains" like Dexter and H Nu.
The 'Security & Resilience' Pivot ✅
MP Materials’ $550 million public-private partnership with the US Department of Defense exemplifies this trend, building a domestic rare earth magnet supply chain for defense and energy.
Climate Intelligence & Adaptation Tech ✅🌫️
Two large DFI-backed projects in Turkey and Micronesia highlight that adaptation is moving beyond small grants into significant financing, signaling the growing importance of this challenge. We are still waiting to see more VC activity in this space.
CapEx-Intensive Clean Tech & the “Valley of Death” ✅
Mid-stage climate tech financing is becoming more sophisticated with government grants enabling early manufacturing de-risking (eg. Australia NetZero Manufacturing Initiatives or CorePower in Sweden) and DFI financing unlocking commercial debt for first-of-a-kind projects (eg. Atome in Paraguay with EIB Financing). This underscores that “blended finance” is not monolithic—but a modular toolkit deployed to target specific barriers (tech, market, or finance) to scale.
Regional Policy Fragmentation ✅✅
July investment activity suggests distinct investment archetypes are emerging: Europe: Policy-driven infrastructure & regulation, U.S.: Strategic industrial & data center policy and Asia: State-directed capital & emerging market solutions. For founders, scaleups and investors, success increasingly depends on aligning technology type and maturity with region-specific policy, funding, and deployment environments.
Europe
Key highlights:
Energy: Four large deals: NeXtWind (Germany, ~$1.6 billion debt financing), Climeworks (Switzerland, ~$0.2 billion round for Direct Air Capture), Sunsave (~$0.15 billion VC/Debt funding for residential solar and batteries), and ~$0.14 billion in funding to rebuild hydropower in Ukraine. DAC saw strong activity with three investments (Climeworks, MissionZero, and Carbyon).
Industrial & AFOLU: Strong mid-to-small-sized investment activity in the Industrial (9 deals) and AFOLU (7 deals) sectors.
North America
Key highlights for North America:
Energy and Industrial Dominance: These sectors are dominating the investment space. Is the "One Big Beautiful Bill" impact already visible?
Energy: Despite OBBB, a ~$260 million project finance package was secured for Recurrent Energy's Kentucky solar project, and ~$200 million+ was raised by Lyten to acquire Northvolt assets in Europe.
Industrial: MP Materials secured ~$550 million in a public-private partnership for a domestic supply of rare earth minerals, and TerraCO2 raised ~$124 million in a Series B round to develop low-carbon cement alternatives, with investors including Breakthrough Energy.
AFOLU: Chestnut Carbon, a nature-based carbon removal developer specializing in afforestation projects, secured over $200 million in project financing.
Canada: Only 2 out of 31 investments were in Canada. We are still looking for signs of Canada's growing role in climate investments in North America.
Asia and RoW
In July, we gained more visibility into climate investment activities in these regions.
15 deals in Asia, totalling ~$0.8 billion
21 investments in Australia, Oceania, Africa and South America, totalling ~$0.4 billion
Asia
Key highlights:
Diverse Activity: We saw diverse activity across the region, with India's emerging climate tech VC space being one to watch.
Climate Adaptation/Resilience: A notable government guarantee program in Turkey, backed by the World Bank, will de-risk and mobilize private commercial financing for firms implementing climate adaptation measures.
Transport: XPeng AeroHT in China, a manufacturer of electric vertical take-off and landing (eVTOL) aircraft, raised ~$25 million in a Series B round.
RoW
Solid activity in the Rest of the World, with a few highlights:
Energy: Sun King (Kenya) secured a ~$156 million debt securitization for off-grid solutions for low-income households and businesses, offered in a Pay-As-You-Go model.
Industrial: Atome secured ~$135 million in debt financing from the European Investment Bank for a green hydrogen project in Paraguay.
Climate Adoption/Resilience: The Federated States of Micronesia secured a ~$18 million grant from the Global Climate Fund for climate and health initiatives against climate-related diseases.
Australia: The government provided ~$26 million in grant financing to 12 startups as part of its ~$275 million Net Zero Manufacturing Initiatives.
What to observe during the rest of 2025?
The second half of 2025 will be shaped by policy risk (subsidies and tariffs), geopolitical divergence, and capital-flow shifts. We will continue watching the impact of:
"One Big Beautiful Bill"
Tailwinds for Baseload Clean Tech
Surge in Grid Tech & Energy Storage
The 'Security & Resilience' Pivot
More visible needs for Climate Intelligence & Adaptation Tech
Mid‑Stage CapEx-Intensive Clean Tech Faces “Valley of Death
Regional (Policy) Fragmentation
What are other market shifts to observe?
Stay tuned for the next monthly update.
Join our community discussion next week, we’d love to hear your take.
If you’re passionate about channeling more capital into climate solutions, share this article with your friends and family.
And keep an eye out for our next monthly update!