PE trio launch climate fund in Asia

Asian Development Bank, ORIX Corporation and Robeco have injected an initial $400m into the venture

Three investors have partnered to launch an Asia-focused private equity fund that will invest in the region’s climate and energy opportunities, primarily in environmentally supportive and low-carbon related businesses.

Development finance institution the Asian Development Bank, ORIX Corporation and Robeco Institutional Asset Management have formed a new firm, Asia Climate Partners, to address opportunities in the sector, according to a joint statement.

The founders will invest $400 million to launch the venture, with the firm based in Hong Kong and managed by Robeco’s private equity team.

The fund will invest in renewable energy, clean technology, natural resource efficiency, water, agriculture, forestry and other climate-friendly companies, the statement said.

“We believe that ACP provides an innovative platform to deploy capital into climate-related transactions across Asia that are designed to generate attractive returns,” said Todd Freeland, director general of ADB’s private sector operations.

“ACP will benefit from the combined strengths of Robeco as a global asset manager and ORIX and ADB, which are two of the most active and successful investors in the low-carbon sector in Asia. The substantial resources that the founding partners are committing to ACP will help position it as the preeminent investor in this asset class in Asia from day one, and represents a clear signal of the depth of our collective belief in the investment strategy and its return potential.”

The fund is intended to address the significant environmental challenges faced in Asia Pacific economies, including poor air and water quality, inadequate and unreliable supplies of energy, and significant inefficiencies in the utilisation of existing supplies of energy and other natural resource inputs and outputs.

The public and private sector are increasingly focusing on these historically neglected sectors, with investment in renewable energy and resource efficiency holding the potential to grow at 2 to 3 times economic growth in Asia over the next several decades, according to the firms.

“I am delighted that ADB has chosen Robeco to act as investment manager of this exciting joint venture platform,” Leni Boeren, a member of the management board of Robeco said. “This is a milestone in our successful cooperation with ORIX and is further evidence of our growing commitment to creating attractive new investment opportunities in Asia for our institutional investor partners around the world.”

Yuichi Nishigori, corporate senior vice president at ORIX, added, “The energy and environmental sectors are core components of our business strategy, and our investment of capital and people into ACP represents a continuation of our commitment to being a leader in this field. Asian countries are in need of securing rapid and sustainable economic growth and must satisfy the ever-increasing needs of their people for a higher living standard and quality of life. This initiative will contribute to providing necessary capital for Asian economies to meet such demands.”