OPIC pours $500m into ‘renewable resources’ funds

30 June 2011

The US Overseas Private Investment Corporation (OPIC) has approved $500 million in financing for five funds investing in the renewable energy and agriculture sectors in developing countries.

The investments are expected to mobilise a total of $1.5 billion and fulfil an OPIC pledge made at the Cancún climate talks in December, when it committed to provide at least $300 million in financing for new private equity investment funds.

Fifty-six funds responded to a call made by OPIC for “proposals to help catalyse and facilitate private sector investments promoting renewable resources globally”.

The five funds chosen are:
•Aloe Environment Fund III, into which OPIC will contribute $136 million of its $420 million target. The fund will invest in “climate solutions centered around renewable energy generation, recycling, and energy efficiency”, specifically in India and Southeast Asia. It will primarily target small and medium-sized enterprises.
•Renewable Energy Asia Fund, with OPIC contributing $62 million towards its $187 million target. It will invest in renewable energy projects and project developers in Asia, primarily in India and the Philippines. The fund – managed by Berkeley Energy – currently has $125 million under management.
•Mekong Renewable Resources Fund (MRRF), with OPIC putting in $50 million towards a $150 million target. MRRF will invest in “renewable resource opportunities” in Vietnam, Cambodia and Laos, specifically in environmental services and infrastructure, renewable energy and energy efficiency. It will concentrate primarily on small and medium-sized enterprises. The fund is managed by Indochina Capital Corporation, a Vietnam-based asset management firm.
•African Agriculture Fund, with OPIC contributing $100 million of its $300 million target. The fund will focus on food production in Africa, via investing in the primary (farms and plantations) and secondary (processing and animal feeds) farming sectors, and in the agricultural services and infrastructure sectors. Managed by Phatisa, the fund reached a first closing at $151 million in January.
•The Silverlands Fund, into which OPIC will invest $150 million of a $450 million target. This fund will invest in companies in the agricultural sector in Malawi, Mozambique, South Africa, Tanzania, Uganda and Zambia. It will invest across the value chain, but with a focus on farmland and primary production businesses. The fund is managed by UK-based SilverStreet Capital.

Mark Nicholls