US$200m climate debt fund launched by responsAbility
by Ben Poole
Swiss impact asset manager responsAbility has announced the first close of its new energy access fund. The private debt fund addresses the lack of access to clean power globally with a strong focus on Sub-Saharan Africa and South and Southeast Asia. It is set up as a blended finance structure offering different risk tranches and has received commitments from a number of prominent public and private investors. A second close is expected for later this year.
The fund is an initiative launched in partnership with AHL Venture Partners, Ashden Trust, Bank of America, Bohemian Impact Investments, Calvert Impact Capital, Clean Technology Fund, EIB, Facebook, FMO, Good Energies Foundation, the government of Luxembourg, IFC, Norfund, OeEB, Shell Foundation, Snowball and UK DFID, among others. At its first close the Fund stands at US$151m. The firm says it could grow to US$200m with a second close anticipated for later in 2020.
Incorporated in Luxembourg as a 10-year closed-ended structure, the Fund targets companies that provide solutions to households without access to electricity and to businesses looking for cleaner, cheaper and more reliable energy. Beyond the financing of the dynamic off-grid energy sector, it is the first investment fund of this scope to actively address the solar potential for the commercial and industrial (C&I) sector.
Over the lifetime of the fund, portfolio companies are expected to provide clean power to more than 150 million people, add 2,000 MW of clean energy generation capacity and reduce CO2 emissions by 6 million tonnes.
“With a solid track record of investing in the energy access space, a committed team of experts and a full pipeline in place, we are ready to expand our activities to include the high-impact commercial & industrial sector,” explained Antoine Prédour who oversees responsAbility’s energy debt financing activities. “By partnering with entrepreneurs as a first commercial lender, we want to enable clean energy businesses to scale up their activities and attract more funding in the long run.”
“This investment addresses the critical need for access to affordable, clean energy in emerging markets,” said Dan Letendre, managing director in Bank of America’s Environmental, Social and Governance division. “The investment is part of our Blended Finance Catalyst Pool and our broader sustainable finance initiatives, which are helping to advance the United Nations Sustainable Development Goals.”
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