Swiss impact investor responsAbility Investments has announced a $500 million climate investment strategy as part of a collaborated response to rising CO2 emissions in Asia, according to a statement on Tuesday.
German state-owned development bank KfW and Dutch development bank FMO are anchor investors in the strategy that aims to make investments in low-emission technologies and attract institutional investors. “Our investment strategy appeals to institutional investors who are looking for both environmental impact and financial value from their investment,” said Ewout van der Molen, responsAbility’s head of climate finance.
The climate investment strategy uses a blended finance approach, i.e it combines public funding with private capital to back high-impact projects. The target of $500 million will involve a significant amount of private capital. “This blended-finance approach will enable institutional investors to participate in solving Asia’s climate challenges while achieving an attractive risk-adjusted return on their portfolios,” said responsAbility in a statement.
responsAbility’s climate strategy will focus on sectors such as renewable energy, battery energy storage, electric mobility, energy efficiency, and circular economy.
“As a key step towards a low-carbon economy in Asia, responsAbility provides a significant opportunity for investors to make a tangible and measurable difference in the fight against climate change. The successful launch will enhance access to capital for Asian businesses that are keen to reduce their carbon footprint,” der Molen said.
The strategy is set to use a blended finance structure, combining public funding with a significant amount of private capital.
Home to more than half of the global population, Asia is the largest emitter of greenhouse gases. There is an urgency for stakeholders in the continent to invest in climate-friendly technologies and infrastructure due to a projected strong increase in energy demand by 2050.
responsAbility, KfW, and FMO have all been actively investing throughout Asia for years. The three often work and invest together in climate-related projects.
responsAbility raised $106 million for its climate-smart agri and food fund in June aimed at investing across Asia Pacific, Latin America, and Africa. FMO had committed to the fund.
responsAbility is also known for its investment in Indonesia’s newly-minted unicorn eFishery, Vietnam-based Vinfast’s EV infrastructure, and Indonesia’s insurance tech business Qoala, among others.
Meanwhile, much of KfW’s exposure to the region was done through its investment arm DEG. The latter recently became the lead arranger for a $25 million syndicated loan facility for Chinese clean water operator Silver Dragon Water Supply Group Limited (SDWSG) and committed a $37 million financing to Thai microfinance provider Muangthai Capital, among others.