Goldman Sachs Asset Management (GSAM) is launching a $3 billion climate credit fund to support clean energy and sustainable transport investments. The West Street Climate Credit Fund will finance companies advancing the low-carbon transition, including renewable energy firms and sustainable transport providers, according to sources familiar with the matter.
The fund will focus on North American and European markets, targeting 8% to 10% net returns on an unlevered basis and up to 13% for leveraged investments. GSAM is committing $150 million to the fund, which will primarily provide senior lending, with flexibility for junior debt financing when needed. The initiative will be managed within GSAM’s private credit division, which oversees approximately $145 billion in assets under management.
The launch of the West Street Climate Credit Fund comes amid uncertainty over US climate policies. While President Donald Trump’s administration has signalled a rollback of climate policies, analysts remain optimistic that the transition to a low-carbon economy will continue.
Despite Trump’s stance on electric vehicles, wind, and solar projects, Citigroup Inc. analysts anticipate continued growth in renewable energy investment. Similarly, Schroders Greencoat LLP predicts that a worst-case scenario for green energy financing is unlikely. While this fund is a new climate-focused investment strategy, Goldman Sachs previously raised $1.6 billion for an ESG private equity fund in 2023, reinforcing its commitment to sustainable finance.
