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BII backs fund supporting clean energy businesses in south-east Asia

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Published: 23 January 2024

British International Investment has committed capital alongside other DFIs and private investors to the Clime Capital-managed fund, which raised a total $127m at first close.

The South-East Asia Clean Energy Fund II is managed by Singapore-based Clime Capital | Gardens by the Bay, Singapore | Daniel Welsh on Unsplash

British International Investment (BII), the UK’s development finance institution (DFI), has committed $13.5m (€12.3m) to a fund which aims to accelerate the clean energy sector in south-east Asia.

BII is among a group of junior first-loss equity investors who have committed to providing early stage capital to promising clean energy businesses in the region.

The South-East Asia Clean Energy Fund II (SEACEF II), which is managed by Singapore-based fund manager Clime Capital, secured $127m on its first close with the support of a mix of DFI partners and private investors. 

Additionally, and according to BII, this is the first blended investment strategy established in south-east Asia to provide early-stage high-risk capital to support businesses within the renewable energy generation, energy efficiency, electric mobility, and electrical grid sectors. 

The commitment will contribute to the UN Sustainable Development Goals (SDGs) on Affordable and Clean Energy (SDG 7) and Climate Action (SDG 13).

Backers of the fund include Allied Climate Partners, Australian Development Investments, the Global Energy Alliance for People and Planet (GEAPP), and Impact Assets, among others.

Senior equity investors aside from BII, include the Cisco Foundation, Netherlands’ FMO, the International Finance Corporation (IFC), Norway’s Norfund, REI Co-op, and Sweden’s Swedfund International.

Sustainable economic growth

BII’s commitment to the fund forms part of the DFI’s objective in south-east Asia, to provide the investment capital needed to boost clean and sustainable economic growth and support the region’s green energy transition. It is also part of its overall goal to direct 30% of total new commitments to climate finance.

The announcement comes after BII and ADB Trade and Supply Chain Finance Program signed a $100m risk-sharing agreement to promote green trade in Asia, which will help international banks increase financing support to local banks in south and south-east Asia. A collaboration which addresses demand for longer tenor finance to support climate related projects particularly within the renewable energy sector.

Srini Nagarajan, managing director and head of Asia at BII, commented: “Unlocking the potential of clean energy solutions and businesses is a priority for BII to help address climate change. It is part of our strong commitment to support sustainability goals in the region through climate finance. Through SEACEF II, BII is delighted to be part of this innovative blended finance vehicle to mobilise more capital towards accelerating sustainable development in Southeast Asia.”

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