Leading institutional investors back $412m first close of new Climate Investor One facility

Leading institutional investors have backed the first close of a new “blended finance” climate investment facility called Climate Investor One (CIO) with $412m (€365.6m).

CIO is the inaugural initiative of Climate Fund Managers (CFM), which was set up in October last year as a joint venture between Dutch development bank FMO and Phoenix InfraWorks, the Cape Town-based infrastructure specialist headed by former Macquarie Africa Chairman Andrew Johnstone.

It the first of an intended series of initiatives designed to combat the effects of climate change. Targeting Africa, Asia and Latin America, CIO will focus on solar, wind and ‘run-of-river’ hydro renewable energy projects.

CFM, based in The Hague, says it is committed to responsible investment, and has established a Responsible Investment Code, a Responsible Investment Policy and an Environmental and Social Management System.

CIO will provide expertise, technology and financing to renewable energy projects in developing and emerging markets by mobilizing private sector financing “at scale” supported by what is being termed “catalytic public sector donor funding”.

And strong ‘cornerstone support’ came from the Netherlands in the form of the Dutch Ministry of Foreign Affairs and Aegon Asset Management – along with Norway’s KLP, South Africa’s Sanlam Investments and the Royal Borough of Windsor & Maidenhead Pension Fund in the UK.CIO seeks to simplify the manner in which capital is deployed and reduces complexity by delivering a “whole-of-life” solution that provides a single financing source for each of the respective development, construction and operational phases of a project’s lifecycle.

“FMO is proud to be the initiator of this global climate fund”

“FMO is proud to be the initiator of this global climate fund which innovatively, through a blended finance approach, catalyses institutional investors from a broad spectrum seeking commercial, social and environmental returns into clean energy in emerging markets,” said FMO’s CEO Jurgen Rigterink. Johnstone hailed it as representing “a new way of doing business”.

Nick Greenwood of the Windsor & Maidenhead fund: “We believe that investments in unlisted real assets including those in emerging markets will generate superior long-term returns with both a financial and social nature.”

KLP’s CEO Sverre Thornes said the new vehicle “offers long-term investors like KLP the opportunity to partner up with public sector and industrial expertise in order to effectively develop and finance new projects in emerging markets”. Link