Asian Development Bank, the multilateral development finance institution for Asian countries, could invest $100 million with venture capital fund managers focused on the cleantech sector in Asia.
“This is our new initiative to set up multiple cleantech venture capital funds investing in early stage projects or start-ups across Asia,” Shin Kim, an investment officer with the Private Sector Opportunities Department at the ADB, told PEI Asia.
If the proposal is approved by ADB's management, it will issue a “request for proposals” from interested fund managers for a second time. The last time the bank called for proposals from fund managers was in 2007. Then, 19 fund managers had approached ADB, and after conducting due diligence, the lender selected five to manage clean energy funds.
Kim said board approval is expected by the end of this year or early next year, following which the bank will select the best fund managers through a competitive process. The funds will be focused on clean energy, but the broader mandate is to invest in the cleantech sector at large.
The fund managers selected in the bank’s first such initiative were Asia Clean Energy Fund, a pan-Asian $200 million fund; the $150 million China Clean Energy Capital Fund; the $250 million China Environment Fund III; the South Asia Clean Energy Fund, a $200 million fund managed by US-based Global Environment Fund and India’s Yes Bank; and MAP Clean Energy Fund, for which Middle East & Asia Capital Partners is targeting $400 million.
In June 2009, ADB and Jeddah-based Islamic Development Bank (IDB) teamed up to launch a pan-Asia Islamic infrastructure fund. Managed by CIMB Standard, that fund has a commitment of $250 million from its sponsors and is targeting commitments of $500 million for a final close. The fund will make Shariah-compliant equity investments in emerging countries across Asia including Bangladesh, Indonesia, Malaysia, Pakistan and Central Asia.
Established in 1966, ADB aims to promote economic and social development in Asian countries. It does this through the provision of loans and technical assistance. Its investments are made only in Asia and its focus is on the infrastructure, telecom, utilities, transportation, manufacturing and consumer products sectors. ADB has committed about $800 million to 55 private equity funds investing in Asia as of December 2009.