The funding aims to target carbon reduction across Asia, with a focus on Vietnam and India’s energy transition, looking at areas such as renewable energy, electric mobility and energy efficiency.
Swiss impact investment manager responsAbility, part of UK-based M&G, has secured funding of $100m (€92m) which will go towards reducing carbon emissions in Asia.
The funding, which was made on behalf of M&G Life business through its $165bn Prudential With-Profits fund, will target climate-friendly technologies and infrastructure such as renewable energy, electric mobility and energy efficiency.
Speaking to Impact Investor, Ciaran Mulligan, chief investment officer at M&G, said there is currently a strong case for investing in private assets with an impact focus across emerging markets, highlighting a growing interest in the energy transition among international investors.
“The access to deal flow and the propensity of investors looking at regions such as Vietnam isn’t as developed as with other regions, so you have to really seek these deals out,” Mulligan noted.
Regulatory environment
Due to the challenges of these markets, Mulligan added it is essential to understand the regulatory environment of countries such as India and Vietnam which may differ from other Southeast Asian countries.
“This particular opportunity is multifaceted in terms of its focus on energy efficiency, electric mobility and renewable energy. All of which are very important to those economies,” he added.
The investment is part of responsAbility’s climate investment strategy which was launched in November 2023. Existing investors of the fund include Germany’s development bank KfW and the Dutch development bank FMO.
The strategy uses a blended finance structure combining public funding with private capital to support high-impact climate-friendly projects.
M&G previously invested $256m into two responsAbility impact strategies in 2022.
This latest investment comes after responsAbility said it planned to invest up to $35m in AMPIN Energy Transition, an Indian renewable energy project developer contributing to India’s green energy drive, as reported by Impact Investor.
Energy transition
The need to invest in climate-friendly technologies and infrastructure in emerging markets is an increasingly urgent one. Furthermore, Asia faces a double challenge, as the continent is already the largest emitter of greenhouse gases, accounting for more than 50% of global CO2 emissions, and is facing a projected strong increase in energy demand by 2050.
M&G said that the fund aims to target direct CO2 savings of around 16 million tonnes over the entire lifetime of its investments which amounts to the equivalent of running four coal power plants continuously for a year.
Companies targeted by the fund include a business establishing infrastructure for electric-vehicle charging across India, renewable energy solutions in Vietnam and a global industrial wastewater treatment company providing water treatment solutions across Asia.
