International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, proposes an equity investment of $25 million or upto 20 per cent of the total commitments of the Aloe Environment Fund III.
The private equity fund is targeting to raise between €200-€300 million (~ $265-$400 million), which will focus on investments in companies whose main business activities sustain, restore and improve the environment.
The funds will be used for reaching out to companies that are based in developing countries of Asia or are planning to expand into these countries and will be managed by Aloe Private Equity. It will invest at least 80 per cent of its capital in India, China and IFC’s mandated countries in Asia.
Aloe was incorporated in 2004 by Jean-Pascal Tranié and Vivek Tandon, former executives at Viventures Partners, then the venture capital arm of Vivendi Universal. The firm primarily invests in companies based in Europe and Asia (with a focus on China, India and South East Asia) having interests in technology, energy, chemistry/new materials, recycling, clean and renewable energy, waste recycling, emissions controls, and eco-processes sectors.
The company is based out of Paris, with offices branched out in Hyderabad, India; Beijing, China; Mauritius; and London, United Kingdom.
So far, Aloe has managed three funds namely Aloe Environment Fund I, Aloe Environment Fund II and a parallel fund to Aloe Environment Fund II, called Green Investment Asia Sustainable Fund, which was established to specifically focus on investing in developing countries in Asia.
Clean tech as a theme is attracting the interest of institutional investors. Clean technology investing in India is largely centred around clean energy. Earlier, in May 2011, the Asian Development Bank invested $20 million into Aloe Environment Fund III to provide financial assistance to new technology companies focused on climate change mitigation and adaptation or environment protection.
Early this week, IFC acquired 19.5 per cent stake in Tata Cleantech that proposes to provide financing and advisory services to small and medium enterprises, as well as large corporate houses in India, engaged in climate change initiatives.
There are several clean energy funds which are presently active who seek attractive investment opportunities in waste management, water treatment, energy efficiency, industrial equipment and renewable energy (such as wind, solar, biomass and hydel power).
IFC, one of the most prolific foreign institutional investors in India, had also provided $50 million to PTC Financial Services Ltd earlier this year for financing smaller infrastructure firms developing sustainable and renewable energy projects. IFC has also put money into several other renewable energy firms in India in the past two years including Bhilwara Power, SunBorne Energy, NDPL Solar, Sapphire Industrial Infrastructures, Applied Solar and Azure Power.