Global Climate Partnership Fund wins over first pension investor

Medical scheme commits $30m to KfW-sponsored microfinance and renewables fund.

The Global Climate Partnership Fund (GCPF), a $153m (€117.3m) financial sector and renewable energy fund started three years ago by German development bank KfW and the country’s environment ministry, has won over its first pension investor. The Ärzteversorgung Westfalen-Lippe (AEVWL), a €8.8bn pension scheme for doctors in the German state of North-Rhine Westphalia, which has allocated $30m to the fund, said it viewed its investment as a contribution to climate protection. Other investors in the GCPF are the International Finance Corporation (IFC), the Danish foreign ministry and Deutsche Bank, which is also the fund’s manager. The IFC is the biggest of the group, having invested $46.5m. It is followed by the German environment ministry ($41.8m), the KfW ($23.5m) Denmark ($7.7m) and Deutsche ($4m). Although originally sponsored (and capitalised) by German government entities, the GCPF was not launched as a Spezialfonds, or German institutional fund, but as a Luxembourg SICAV (société d’investissement à capital variable). According to MichaelSchneider, who heads the four-member advisory team for the GCPF, this was the best way for the fund, essentially a public-private partnership, to attract inflows from the private sector. “The public sector takes on initial risks to induce investment from the private sector in countries that are considered to be difficult,” Schneider said. The GCPF invests both in the financial sector and in renewable projects in 13 developing countries. Those countries include Brazil, China, India, Mexico, South Africa and Turkey. In terms of performance, GCPF chair Monika Beck said the fund “operates fully profitably and is able to pay the full target returns to all investors.” In 2012, the return for Class A shares was 3.7% and for Class B shares 6.12%. Beck also said in the report that the fund expected additional investment in 2013. That seems certain in light of the fact that the KfW has only invested one-third of the $75m it committed to the GCPF overall. Beck’s primary occupation is at the KfW, where she heads the competence centre for sustainable development.