“Climate change will hit Asia hard in coming decades. Investing in these venture capital funds will help channel finance into innovative and affordable technologies that tackle the challenge of climate change in ways that are suited to developing Asia,” said the director general of A.D.B.’s Private Sector Operations Department, Philip Erquiaga.
The $60 million venture capital fund, respectively, went to three different funds – each receiving $20 million. These funds are the Aloe Environment Fund III, the Keytone Ventures II, and the VenturEast Life Fund III.
Using the venture capital fund of $20 million from the A.D.B., the Aloe Fund will be used to invest in Asian companies whose technologies are specifically made for China, India, and other countries in the Southeast Asia. They will also focus on transferring technology and know-how.
The Aloe Fund will be managed by the Aloe Private Equity, an entrepreneurial and global investor dedicated to growing highly profitable environmental and socially sustainable companies. They are targeting a total fund size of 200 million euros ($285.33 million) to 300 million euros, and aim to make eight to ten investments worth 20 million euros each.
The Aloe Environment Fund II, which had a target size of between 100 million euros and 150 million euros, and was made to be invested in companies working to sustain, restore or improve the global environment, focused on the renewable energy, waste recycling and emissions controls sectors.
The other one-third of the venture capital fund will go to the Keytone Fund, which will be managed by Keytone Capital Partners II. The money placed by the A.D.B. will go to the $200-million fund that is focused largely on climate change technology firms in sectors such as light-emitting diodes, industrial energy efficiency, electric vehicle and power batteries, and waste management.
Keytone Capital Partners II plans to make around 15 investments worth $10 million to $15 million on climate change technology firms.
The last third of the venture capital funding will go to the VenturEast, a fund manager in India. The firm will be investing a total of $200 million into companies in the Indian market that will focus on healthcare, sustainable agriculture and clean environment technologies.
VenturEast plans to make minority investments in 15 to 18 companies, each investment ranging between $5 million and $15 million.
Robert van Zwieten, the director in the Private Sector Operations Department, said it is critical to ensure that private sector money is available at a very early stage to develop low-carbon technologies.
A.D.B.’s move was done because of predictions that mitigation costs in developing countries will grow to over $100 billion yearly by 2030. In addition, adaptation costs are estimated to be at $40 million yearly between now and 2050 for Asia and the Pacific.
A.D.B. has been integrating climate change components into its planning and investments in developing Asia. The bank has invested around $4.8 billion into clean energy projects in the past three years alone, and has approved 27 percent of its total approved loans focusing on supporting projects with clean energy components.
