Hong Kong-listed alternative asset manager China Everbright Limited has launched the Everbright Belt & Road Green Fund, raising 10 billion yuan ($1.4 billion, €1.3 billion) to date.
The capital has been raised by three anchor investors: the asset manager; its parent, government-backed conglomerate China Everbright Group; and sister company China Everbright International, which is active in environmental protection and billed as the largest investor and operator of waste-to-energy projects in the country.
The fund, which has a final target of 20 billion yuan, will invest in such sub-sectors as the energy transition, energy storage, hazardous waste treatment and social infrastructure, in countries and regions where projects are being developed as part of China’s Belt and Road Initiative.
The vehicle has a dual currency structure of “domestic renminbi funds plus overseas US dollar funds”, CEL said in a statement.
The 10 billion yuan part of the vehicle will be divided into a fund of funds strategy and a municipal direct investment fund, according to the statement.
Su Guang, managing director of CEL and general manager of Everbright Belt & Road Green Fund, told Infrastructure Investor: “The municipal direct investment fund was established by Everbright Belt & Road Green Fund, with the participation of platforms funded by local governments, local enterprises and China’s domestic RMB institutional investors [who] target invest[ments] in private equity funds.”
CEL said the fund will work with international multilateral institutions and “top-tier investment institutions” to establish environmental, social and governance investment strategies and a benchmarking system. The firm did not provide further details.
It added that it will also collaborate with governments and companies “along the ‘Belt and Road’ to launch USD funds when time is mature”. However, it is unclear whether investments will be made in projects specific to the Belt and Road Initiative or simply in countries through which it passes. A spokeswoman for the firm declined to comment.
“The fund has completed multiple rounds of discussions and negotiations with central enterprises, municipal-level state-owned enterprises, platforms funded by local governments, as well as renowned private enterprises,” Guang said.
“Some enterprises’ investment approval processes will soon be completed. Also, the fund is actively talking to institutional investors for the renminbi fund; for example, several financial institutions and many domestic renowned funds of funds.”
The fund is one of dozens of initiatives the Chinese government presented during the Second Belt and Road Forum for International Cooperation held in Beijing last year.
CEL made its first investment in infrastructure in October 2016 when it acquired the right to operate Tirana International Airport in Albania through 2027. Since then, it has also added Norwegian public transport operator Boreal Group and Village Telephone, an optical fibre network provider in Hong Kong, to its infrastructure portfolio.
All three investments were made through the Everbright Overseas Infrastructure Investment Fund, which the firm launched in 2017 and closed last August on $450 million, significantly lower than its original $1 billion target.