ADB, ORIX & Robeco form $400M Asian climate-related PE fund

The Asian Development Bank (ADB), ORIX Corporation (ORIX) and Robeco Institutional Asset Management B.V. (Robeco) have formed Asia Climate Partners (ACP), a joint venture that will undertake commercially-oriented private equity investments across a variety of environmentally supportive, low-carbon transactions throughout Asia.

ACP, which will be capitalised initially with $400 million from its founding partners, will be based in Hong Kong, China and will invest in renewable energy, clean technology, natural resource efficiency, water, agriculture, forestry and other climate-friendly companies and transactions that are structured to generate market-driven, risk-adjusted returns and have a positive environmental and social impact.

Todd Freeland, director general, ADB’s private sector operations department, said, “We believe that ACP provides an innovative platform to deploy capital into climate-related transactions across Asia that are designed to generate attractive returns.”

Robeco is the investment manager of this joint venture platform. “This is a milestone in our successful cooperation with ORIX and is a further evidence of our growing commitment to creating attractive new investment opportunities in Asia for our institutional investor partners around the world,” Leni Boeren, member of the management board, Robeco, said.

Adding to this Yuichi Nishigori, corporate senior vice president, ORIX, said, “The energy and environmental sectors are core components of our business strategy, and our investment of capital and people into ACP represents a continuation of our commitment to being a leader in this field. This initiative will contribute to providing necessary capital for Asian economies to meet such demands.”

Between 2011 and 2013, ADB mobilised nearly $10 billion in climate-related financing, and its total financing volume over this period was in excess of $64 billion, including over $22 billion of co-financing. Set up in 1966, ADB is owned by 67 member countries, 48 from the Asia Pacific region.

In 2013, ADB invested $2.3 billion in clean energy and has pledged to continue investments of at least $2 billion per year.

The agency, which has been largely focused on supporting public sector projects in India, has been active in making equity investments in private Indian firms of late.

Recently it struck two back-to-back deals in the renewable energy field. It joined hands with the private equity arm of Goldman Sachs and South Asian Clean Energy Fund, a PE managed by Global Environment Fund, to together invest $140 million (approximately Rs 835 crore) in ReNew Power Ventures, a renewable energy producer.

This came soon after it signed an agreement to make an equity investment of $50 million in Welspun Renewables Energy Ltd.

Some time back it also put in money in Bangalore-based Hippocampus Learning Centres Pvt Ltd, which offers education services to rural children.

(Edited by Joby Puthuparampil Johnson)

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