Copenhagen Infrastructure Partners has held a $1 billion close on its fund targeting renewable energy projects in emerging markets.
The CI New Markets fund was launched earlier this year and reached a $700 million first close following commitments from Nordic pension funds PensionDanmark, ATP, KLP and Lægernes Pension The remainder was supplemented by institutions including Danish export credit agency EKF and what CIP described in a statement as “a prominent group of German and Austrian institutions”.
“We had been thinking about this for a long time but the risk profile for renewables is a lot lower now than it was three years go,” CIP Partner Steen Lønberg Jorgensen told Infrastructure Investor. “Investors want more exposure to emerging markets in general and to energy in emerging markets.”
The fund is yet to make an investment, although CIP said it expects to begin doing so next year. It is targeting wind and solar investments in South-East Asia, Latin America and parts of Eastern Europe. Targeted countries within these regions include China, India, Brazil, Mexico and Poland, Jorgensen said, with a 15 percent net IRR target.
“There are few of the more established infrastructure managers in [renewables in] these markets,” Jorgensen explained.
He added that the strategy will differ somewhat from CIP’s flagship funds, with the New Markets vehicle financing and building assets alongside project partners and then selling its interest once construction is completed, as opposed to holding for the length of the fund’s term.
CIP has 10 investment professionals working on the New Markets fund, its first to invest in emerging markets, which is led by Niels Holst. The team also includes Robert Helms, who joined from his role as head of asset management at Orsted in August.