Mobilizing private capital for the emerging market sustainable energy sector
Beijing—The Asian Infrastructure Investment Bank (AIIB) is commiting USD50 million to the SUSI Asia Energy Transition Fund, contributing to its first closing held this week. The fund targets sustainable energy infrastructure investments across the energy transition spectrum, from renewable energy generation to energy efficient measures, as well as those that enable clean energy solutions, such as energy storage and microgrids. AIIB’s commitment to the fund will help SUSI continue to bridge the funding gap in sustainable energy infrastructure and crowds in more private capital to emerging market economies.
The fund has also raised commitments from several other development finance institutions as well as private institutional investors, with a total contribution of USD81 million. In 2019, AIIB’s Board of Directors approved a commitment of up to USD50 million to the fund and a co-investment sleeve of up to USD50 million for co-investing with the fund, making it the Bank’s first private equity fund contributions dedicated to the energy sector.
While CO2 emissions in many developed countries have been stagnating or even decreasing, Southeast Asia has been recording increased emission levels. This trend is expected to continue for the foreseeable future as the region is characterized by strong GDP growth and favorable population dynamics that are driving up energy demand. Accordingly, directing capital towards a sustainable energy system has become more urgent.
“Our participation in this fund demonstrates our firm dedication to investing in sustainable energy projects that will increase access to clean, safe and reliable electricity for millions of people in Asia,” said AIIB Director General (Banking) Dongik Lee. “By providing capital in emerging markets where it is scarce, private equity has a critical role to play in development. As an investor in funds like this one, we can build diversification across our portfolio and participate in creating an enabling environment to crowd-in more private capital for sustainable energy projects.”
The fund opens the door to renewable energy and energy efficiency projects in emerging Asia to make it easier for them to secure financing to help get their projects off the ground. The focus of the fund is well-aligned with the guiding principles stipulated by AIIB’s Energy Sector Strategy, including promoting energy access and security, realizing energy efficiency potential, reducing carbon intensity of energy supply, and catalyzing private capital. It will also contribute to AIIB’s climate target of 50 percent of approved financing to be directed to climate finance by 2025.
Additional information about the SUSI Asia Energy Transition Fund can be found here.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 103 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Working with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
About SUSI Partners
SUSI Partners is a Swiss infrastructure fund manager specialized in sustainable energy infrastructure investments. The firm currently manages EUR 1.6 billion in investor commitments across six institutional funds focused on opportunities across the energy transition spectrum, including clean energy generation, energy efficiency measures, and energy storage and integrated solutions. With a successful track record of more than 100 transactions in 20 countries to date, SUSI Partners seeks to achieve attractive risk-adjusted returns for its clients and their beneficiaries while contributing meaningfully to achieving global carbon neutrality.