Clime Capital, the Singapore-based fund manager focused on accelerating the low carbon transition, has on Monday announced the first close of the South East Asia Clean Energy Fund II (SEACEF II), with $127 million committed.
SEACEF ll is the first blended investment fund established in Southeast Asia to provide early-stage high-risk capital to support promising businesses accelerating the region’s low-carbon transition, Clime Capital said in a statement.
Like SEACEF I, SEACEF II will invest in promising renewable energy generation, energy efficiency, electric mobility, and electrical grid businesses at their early-stage, high-risk development phases.
SEACEF II will also offer additional capital to accelerate the scale-up of its portfolio companies.
Among others, the fund’s first closing is backed by junior first-loss equity investors, primarily philanthropic and government-supported organizations, including Allied Climate Partners (ACP), Australian Development Investments (ADI, an Australian Government initiative), the Global Energy Alliance for People and Planet (GEAPP), and Impact Assets.
Senior equity investors include British International Investment (BII) (the United Kingdom‘s development finance institution), the Cisco Foundation, FMO (the Dutch entrepreneurial development bank), the International Finance Corporation (IFC)(a member of the World Bank Group), Norway’s Norfund, REI Co-op, and Sweden’s Swedfund International.
The first close of SEACEF ll lays the groundwork for Clime Capital’s team to accelerate the net-zero transition by making new investments in promising clean energy projects and businesses.
Several funding transactions in Southeast Asia are under way and will be announced as they are finalised.
SEACEF II draws on the flexible risk capital and investment-making discipline that underlies Clime Capital’s successful inaugural fund, SEACEF I.
Launched in 2020, SEACEF I has made twelve investments. Its investments made through 2022 have raised more than 27 times the capital provided by SEACEF I – considerably more than that achieved by governments and private-sector funds.
“As time passes without sufficient progress in developing the critical resources to reduce carbon emissions, the planet needs more businesses focused on accelerating the low carbon transition to thrive, “Clime Capital has proven that our unique combination of early-stage investment ability and clean-energy expertise applied through dedicated on-the-ground teams in Southeast Asia can make a real difference,” said Mason Wallick, Chief Executive Officer and Co-Founder of Clime Capital.
Meanwhile, Clime Capital Chief Investment Officer and Co-Founder Joshua Kramer said by crowding in capital to de-risk early-stage businesses and development projects, the firm has demonstrated that small amounts can be leveraged to produce significant impacts.
“Now is the time to double down on this approach to maximise the results each investment dollar can achieve. We believe our model is the way to achieve this,” he added.
The Hon. Pat Conroy MP, Minister for International Development and the Pacific, said this investment, by the newly established ADI, reflects the Australian government’s view that combining public and private capital is key to accelerating Southeast Asia’s net-zero transition.
“It also underscores our commitment to working with the region to strengthen its resilience in the face of the climate crisis and in doing so supporting the lives and livelihoods of hundreds of millions of people,” he added.
BII Managing Director and Head of Asia Srini Nagarajan said that unlocking the potential of clean energy solutions and businesses is a priority for BII to help address climate change.
“It is part of our strong commitment to support sustainability goals in the region through climate finance,” he added.
FMO Chief Executive Officer Michael Jongeneel said that rapidly scaling clean energy solutions is a core aspect in reducing GHG emissions in line with the Paris Agreement targets.
“By investing in early-stage business models in verticals such as energy efficiency, e-mobility, and electrical grid solutions, this transaction perfectly aligns with our long-term strategy approach of market creation and ecosystem building,” he added.
REI Co-op Chief Financial Officer Kelley Hall said that SEACEF II will accelerate the availability of climate solutions in their key manufacturing countries and grow the region’s clean energy economy.
“We believe investing alongside development finance institutions, philanthropic organizations, and other companies is an innovative approach to climate finance that can scale,” she added.
Felix Barwinek, Senior Investment Manager, Renewable Energy at Norfund said that SEACEF II provides early-stage and development capital to companies in the energy transition space in Southeast Asia, mainly Indonesia, Philippines, and Vietnam.
“This is a great fit for the Climate Investment Fund, which is Norway’s most important tool in accelerating the global energy transition by investing in renewable energy in developing countries with large emissions from coal and other fossil power production,” he added.
Gunilla Nilsson, Head of Energy and Climate at Swedfund, said SEACEF II investments have the potential to support the development and the scale-up of sub-sectors which are central when setting the stage for an accelerated low-carbon transition and sustainable and inclusive development across countries in the region.
Mohamed Gouled, IFC’s Vice President of Industries, said IFC supports innovative, climate-focused equity investments aimed at strengthening the climate finance market across emerging markets, including Southeast Asia, which still heavily relies on fossil fuels.
“Private equity funds can play an important role in bridging the gap in financing early-stage climate infrastructure projects and reduce greenhouse gas emissions,” he added.
GEAPP Chief Investment Officer Stefanie Fairholme said the firm believes the investment in SEACEF II paves the way for GEAPP’s strategic growth in Southeast Asia, through which they aim to mobilize increased capital flows from other philanthropies, development finance institutions (DFIs) and the private sector to achieve impact at scale.
Originally published in TNGlobal