SUSI heads east with €250m Asian energy fund

Swiss investor will target renewables and efficiency projects in Indonesia, Thailand, the Philippines and Vietnam.

Swiss investment firm SUSI Partners has launched a renewable energy fund focused on Southeast Asia, hoping to raise €250 million for the vehicle.

The Asia Energy Transition Fund will be launched alongside The South Pole Group, a Switzerland-based financier focused on global climate-related projects. The pair have enlisted Edgare Kerkwijk, formerly managing director of Asian Green Capital, to manage the fund.

While the main source of funds is expected to be institutional investors, particularly in Asia, development finance institutions and family offices are also being targeted as sources of funds.

SUSI said the spread of investments is likely to feature between 10 and 15 construction-ready renewable energy projects and a similar number of energy efficiency retrofittings. Renewables investments are likely to be diversified across solar PV and wind farms, as well as hydropower plants and behind-the-meter solar.

The firms added that geographical focus is likely to be placed on Indonesia, Thailand, the Philippines and Vietnam, although they stressed the fund could expand its remit to other countries in the region. Low double-digit returns are expected from the fund, SUSI chief executive Tobias Reichmuth told Infrastructure Investor, and between 150MW and 200MW will be procured from the investments. South Pole Group’s chief executive Renat Heuberger added that a first closing of between €80 million and €100 million will be held, with the prospect of a follow-on funds a possibility.

“The renewable energy sector in Southeast Asia is still at an early stage with relatively low penetration of renewable energy in the power generation mix,” Kerkwijk said. “The region will need significant investments in renewable energy and energy efficiency to meet the demands of the various countries in Southeast Asia – both to make their economies more sustainable and to align them with global sustainability targets.”

While the International Renewable Energy Agency says Asia on a whole accounted for 58 percent of new renewable energy additions in 2016, this was largely due to substantial developments in China, India and Japan. The AETF’s initial four targeted countries installed a little under 3.4GW between them.

SUSI’s pitch towards Asian investment comes a couple of months after it revealed it would be launching a global renewables fund, targeting about €1 billion in commitments. Its previous European renewable energy vehicles totalled €100 million and €380 million respectively. The firm remains confident about the European market but believes the Southeast Asian market offers attractive return rates for its investors.

“Our investors have expressed an interest in a vehicle achieving double-digit returns with steady annual distributions. This is hard to achieve in Europe without taking an amount of development risk that wouldn’t be in line with our conservative approach,” Reichmuth said. “In the Southeast Asian market, double digit returns can still be achieved with construction-ready or operational projects that bring a risk-return-profile suitable for institutional investors with a long-term horizon.”