Goldman Sachs has purchased an undisclosed equity stake in Blue Source LLC, a Salt Lake City–based aggregator of greenhouse gas emission reduction offsets, as part of a larger strategic partnership. First Reserve Corp. acquired a 50% stake in Blue Source back in 2006, and Och-Ziff Capital Management has also invested.
The Goldman Sachs Group, Inc. (NYSE: GS) and Blue Source LLC today announced a strategic alliance that combines Goldman’s global leadership in commodities trading and financial risk management with Blue Source’s leading climate change portfolio. As part of the alliance, Goldman Sachs has purchased an equity stake in Blue Source LLC.
Goldman Sachs will off-take, structure and market a broad range of verified emissions reductions (VERs) resulting from certain greenhouse gas (GHG) reduction projects in Blue Source’s portfolio, including those associated with methane management from coal mining, wastewater treatment, landfills and animal waste; energy efficiency; carbon capture and sequestration from fertilizer and natural gas production; and industrial gas destruction.
The alliance combines environmental market experience and skills that can provide real climate change solutions for a broad array of US companies. Blue Source has the resources and expertise to capitalize and develop to scale high-quality GHG reduction projects and Goldman Sachs can bring those reductions to a market increasingly eager to engage a low carbon economy. Furthermore, the recently announced joint venture between Blue Source and certain affiliated investment funds of Och-Ziff Capital Management Group LLC (NYSE:OZM) provides a competitive source of funding to identify, develop and manage emission-related investments, thereby supporting the growth of Blue Source’s offset portfolio. This portfolio provides Goldman Sachs additional tools to help its clients manage GHG-related risks in both the voluntary and pre-compliance carbon markets.
“Combining the market reach and trading capabilities of Goldman Sachs with the project development skills and supply position of Blue Source is not only a winning combination, but an important step in the development of the North American carbon market,” said Bill Townsend, CEO of Blue Source. “This unique agreement is the next step for Blue Source as the US carbon market evolves from voluntary to compliance. We have been able to develop a high-quality portfolio of independently verified emission reductions from projects based in North America, and this new alliance creates an exceptional opportunity to reach a broad range of offset buyers through a highly experienced and well-trusted institution.”
“Goldman Sachs is committed to leveraging the first-mover position of Blue Source and its extensive experience and relationships to provide best-in-class risk management to North American voluntary and compliance buyers,” said Leslie Biddle, Global Head of Commodity Sales at Goldman Sachs. “Interest in the pre-compliance carbon market in the US is growing rapidly and we are excited to be able to offer our clients immediate access to a diverse selection of emission reductions to manage their carbon risk.”
Goldman Sachs was advised by Linklaters LLP; Blue Source was advised by The Blackstone Group and Baker & McKenzie LLP.
About Goldman Sachs
The Goldman Sachs Group, Inc. is a bank holding company and a leading global investment banking, securities and investment management firm. Goldman Sachs provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
About Blue Source, LLC
Blue Source offers businesses multiple approaches for reducing greenhouse gas emissions associated with climate change. Blue Source provides access to capital to fund project development, works with companies on developing projects and oversees production of long-term Verified Emission Reductions (VERs). Blue Source is a portfolio company of First Reserve Corporation, a leading private equity investor in the energy industry, who since 2006 has been a major equity partner in the company, and certain affiliated investment funds of Och-Ziff Capital Management Group LLC. Blue Source has offices in Salt Lake City, Utah; Calgary, Alberta; Houston; Denver, Colo.; Raleigh, N.C.; San Francisco; and New York. For more information visit: www.bluesource.com.