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United States : IFC Catalyst Fund Completes Fundraising at $418 Million for Climate-Related Investments

July 3, 2014

IFC Asset Management Company, a wholly owned subsidiary of the International Finance Corporation (IFC), has raised approximately $418 million for the IFC Catalyst Fund, which will invest in private equity funds and companies focused on climate-related investments in emerging markets.

The fund's mandate is to provide attractive returns to its investors by making equity investments, along with IFC, in a diversified portfolio of funds and companies. It has commitments from eight investors, including two private pension funds from Australia and Germany; the sovereign wealth fund of Azerbaijan; the governments of the United Kingdom, Canada, and Norway; the Japan Bank for International Cooperation; and IFC.

Addressing climate change is a strategic priority for the World Bank Group, and private equity is a catalytic way to initiate climate-friendly investment in emerging markets, said Gavin Wilson, CEO of IFC Asset Management Company (AMC). Private equity funds address the gap that companies face in climate-related sectors and help them scale up efficient solutions and business models. IFC s extensive expertise in emerging markets and its record of success in climate-related investments will provide a unique pipeline of attractive investment opportunities for the fund.

The fund gives investors access to IFC s investment pipeline in selected specialist investment funds focused on building companies and projects in low-carbon power generation, energy and water efficiency, and resource efficiency sectors more broadly. At the same time, the fund enhances IFC s investment activities in the climate sector, a critical issue for its member countries. The fund is managed by an AMC team based in Washington, D.C.

The rapid growth of developing countries is increasing consumption of energy, water, and other key resources with significant implications for the environment. Private equity and venture-capital funds are uniquely suited to financing climate-related investments because they possess the expertise to back innovative projects, support early-stage companies, and help such companies improve their technical and operating capacity. The fund and its investors will benefit from the growth of private equity in emerging markets focused on these sectors.

IFC has invested more than $11 billion in some 600 climate-related projects since 2005. IFC has an additional $400 million in commitments to climate-related funds. The IFC Catalyst Fund has already made four commitments to funds focused on climate-related investment including in renewable energy, cleantech, and industrial biotechnology, in Southeast Asia, China, and Latin America.

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Source: TendersInfo (India)

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