BlackRock boosts SK renewables commitment

BlackRock Real Assets has substantially increased its investment in South Korean offshore wind platform KREDO as part of its 'dual-pronged strategy' of accessing the country’s renewables market.

BlackRock Real Assets has more than doubled its commitment in South Korean clean energy company Korea Renewable Energy Development and Operation Holdings (KREDO Holdings), a company it acquired last July for an undisclosed amount.

Speaking to Infrastructure Investor, managing director Charlie Reid, co-head of BlackRock’s climate infrastructure business in APAC, said the move to increase its commitment to KREDO was part of its “dual-pronged strategy” of accessing the South Korean renewables market as the country gears up to reach its clean energy targets.

Through the KREDO platform, BlackRock now owns a portfolio of offshore wind projects totalling over 3GW of capacity and will look to diversify the platform beyond offshore wind over time. The team is looking to deploy more than $1 billion into KREDO with a target of creating a 10GW clean energy portfolio over the next decade, Reid said, but declined to comment on the size of BlackRock’s commitments to the platform to date.

A source familiar with the matter confirmed the latest investment in KREDO was made through BlackRock’s Global Renewable Power Fund III, which reached a final close of $4.8 billion in March 2021. The firm’s initial investment in KREDO was reported to have been made through the same fund.

“As we look around the world of clean energy and renewables globally, we believe that South Korea is fast becoming a standout market… By 2030, South Korea has a target of 25 percent of power coming from renewables but it’s only at 7 percent today,” Reid said.

“It is a laggard compared to other developed markets globally but that creates a compelling growth opportunity and requires an additional 65GW of renewables to be built out between now and [2030] in just a short period of time… That’s the size of the national electricity market in Australia. It’s a monumental task and it requires very significant capital flows to take effect.”

Last August, the firm also acquired a stake in South Korean solar energy development company Brite Energy Partners, with the aim of developing small-scale solar projects to produce a combined power generation capacity of 350MW.

“At the same time as we are attracted by the offshore wind market in South Korea, solar is one, if not the key technology, particularly today in terms of [the South Korean renewables market], with over 4GW being installed last year. Over 90 percent of that capacity is in small projects below 5MW,” Reid said.

“Brite Energy Partners has been making very strong progress in the [aggregation of small-scale solar assets] and are ahead of business plan.”

Reid said the company expects to have more than 150MW of projects under management by the end of the year across both solar and battery storage.

“South Korea, like other markets globally, is committed to net zero by 2050 and that has the potential to create a 500GW renewables market. When you think, globally, we’ve only recently passed one terawatt of wind and solar installed, [this] helps illustrate the scale of the opportunity in the South Korean market,” he added.