GSSG reaches $196m final close on Solar Partners III

The fund will focus on projects in Japan, South Korea and Taiwan to capitalise on feed-in tariffs and the countries’ decarbonisation targets.

GSSG Solar has reached a final close of $196 million on GSSG Solar Partners III, just shy of its hard-cap of $200 million.

GSSG will primarily deploy capital from the 10-year closed-end fund into late-stage development solar projects in Japan, South Korea and Taiwan. The vehicle has already made one investment, into a project in Taiwan.

More than 95 percent of investors from GSSG’s previous solar vehicle, GSSG Solar Partners II, re-committed to Solar Partners III, the firm said in a statement.

Tomakin Archambault, managing partner and co-founder of GSSG, told Infrastructure Investor that among the new investors in the third fund were a pension fund and a college endowment, the first time that GSSG has secured these types of LPs in its solar vehicles.

“The strategy remains the same as our first two global funds, which is to invest in late-stage development projects in developed nations with robust feed-in tariffs,” he said.

“Each of our target markets is either an actual or quasi-island nation, with dual goals around carbonisation and denuclearisation. If you look at imports of LNG, primarily from Australia, Japan is the world’s number one importer, South Korea number three and Taiwan number five – they’re all importing a massive amount of fuel to power their electricity and they’re seeking decarbonisation while at the same time figuring out ways to reduce reliance on nuclear power.

“More than 50 percent of [global] renewables build over the next 25 years is expected to be in the Asia-Pacific region, so we’re excited to have a differentiated model in a market with a huge amount of opportunity.”

Archambault added that fundraising had been challenging during the covid-19 pandemic, but that the firm’s track record from its first two funds held it in good stead with existing investors. All the investors in its funds are based in the US, which is where GSSG is also headquartered.

“We’re excited to be almost 100 percent focused back on implementation and investment, and when the time is right [we’ll consider new fundraising], especially with folks who would have been ideal investors […] but just for policy reasons couldn’t pull the trigger,” he said, referring to certain institutional investors that instigated pandemic policies of only investing with GPs with which they had an existing relationship.

GSSG has offices in Denver, Tokyo and Taipei, although has been unable to set up an office to date in Seoul due to pandemic travel restrictions.