IFC to invest $15M in SEA clean energy fund

IFC to invest $15M in SEA clean energy fund

THE INTERNATIONAL Finance Corp. (IFC) is investing $15 million (P849 million) in a fund that targets clean energy investments in the Philippines, Indonesia and Vietnam, the World Bank Group member said in a statement on Jan. 23.

The financing will support the Southeast Asia Clean Energy Fund II, which is managed by Singapore-based fund manager Clime Capital, it said.

The fund will invest in “utility-scale solar, wind and energy storage, in addition to helping businesses go to scale in areas ranging from rooftop solar, energy efficiency, electric mobility and grid management,” it added.

The partnership with Clime Capital would provide much needed capital to utility-scale clean energy startups and climate transition initiatives in the region, especially in Indonesia, Vietnam and the Philippines, IFC Vice-President of Industries Mohamed Gouled said in the statement.

“Private equity funds can play an important role in bridging the gap in financing early-stage climate infrastructure projects, advancing the energy transition and reducing greenhouse gas emissions along the way,” he added.

The IFC said its equity investment consists of $10 million from its own account and $5 million from the Finland-IFC Blended Finance for Climate Program.

The Southeast Asia Clean Energy Fund II mainly focuses on investments in the Philippines, Indonesia and Vietnam. Clime Capital earlier this week said it had raised $127 million in commitments for its first close of the fund.

It said the clean energy fund is the “first blended investment fund established in Southeast Asia (SEA) to provide early-stage high-risk capital to support promising businesses accelerating the region’s low-carbon transition.”

The first clean energy fund started in 2020 and has made 12 investments.

The fund has invested in the Real Wind Energy project in Quezon province in the Philippines, according to its website.

The project has a potential capacity of as much as 500 megawatts. Funding was used for the installation of meteorological masts, a grid impact study and an initial environmental impact assessment.

It has also invested in Skye Renewables Holdings, a Singapore-based clean energy developer that covers projects in the Philippines, Vietnam, Malaysia and Singapore. The fund’s investment has supported Skye Renewables’ deployment of clean energy solutions like rooftop solar installations.

As of end-2022, renewable energy accounted for about 22% of the Philippines’ power generation mix.  The government wants to increase the share to 35% by 2030 and 50% by 2040.

“As time passes without sufficient progress in developing the critical resources to reduce carbon emissions, the planet needs more businesses focused on accelerating the low-carbon transition to thrive,” Clime Capital Chief Executive Officer and co-founder Mason Wallick said in the statement.

The fund is also backed by Allied Climate Partners, British International Investment, the Cisco Foundation, Australian Development Investments, the Netherlands’ entrepreneurial development bank FMO, the Global Energy Alliance for People and Planet, Impact Assets, Norway’s Norfund and Sweden’s Swedfund. — Luisa Maria Jacinta C. Jocson