ADB to invest in five clean energy funds

Manilan Asian Development Bank is to commit $100m to five private equity funds investing in the clean energy sector.

Asian Development Bank, the multilateral development finance institution for Asian countries, is investing $100 million (€63.5 million) in five private equity funds that are focussed on the clean energy sector, pending approval from its board when it meets on 15 April.

Shin Kim, an investment specialist at the capital markets and financial sector division of ADB, told PEO these funds include Asia Clean Energy Fund, a pan-Asian $200 million fund; the $150 million China Clean Energy Capital Fund; the $250 million China Environment Fund III; the South Asia Clean Energy Fund, a $200 million fund managed by US-based Global Environment Fund and India’s Yes Bank; and MAP Clean Energy Fund, a $400 million fund managed my Middle East Asia Partners for investing in Southeast Asia, with a focus on Indonesia.

ADB will invest $20 million into each of the five funds, Kim said.

These proposed investments are in line with ADB’s growing focus on the clean energy sector. ADB launched a proposal in 2005 to expand its investments in renewable energy, clean energy and efficient energy technologies to $1 billion every year by 2008. Private equity commitments to these three sectors contribute towards reaching the target. Kim said that the main objective is to bring more capital into this specific sector in Asia.

In 2007, Kim called for proposals for the creation of clean energy funds.  19 fund managers approached ADB, and after conducting due diligence, five funds were selected.

Kim said the five managers were chosen for their experience in private equity or related activities, their familiarity with the clean energy sector in Asia and their fundraising capabilities.

ADB invests only in Asia and its focus is on the infrastructure, telecom, utilities, transportation, manufacturing and consumer products sectors. It is committed to 37 private equity funds with about $550 million invested in them.