Southeast Asia Clean Energy Facility (SEACEF), a Singapore-based fund managed by Clime Capital, has raised $15 million for its first clean energy fund from Microsoft and several international foundations, senior executives at the firm confirmed to DealStreetAsia.
The Southeast Asia-focused fund has two anchor limited partners (LPs) — Sea Change Foundation, and Children’s Investment Fund Foundation.
The other participating LPs were Microsoft, Hightide Foundation, Sall Family Foundation, The David and Lucile Packard Foundation, Grantham Foundation, and the European Climate Foundation. Microsoft contributed 10% to the pot, said SEACEF.
The firm has set a $50 million target corpus for itself, which it plans to raise by the middle of 2022, said Mason Wallick, an investment committee member at SEACEF and managing director at Clime Capital, and Joshua Kramer, director of Clime Capital.
Since its founding last year, the fund has been raising capital from foundations, development finance institutions (DFIs), funds of funds, strategics, and high net worth individuals (HNWIs) in Asia and globally.
SEACEF focuses on companies in solar, wind, energy storage, energy efficiency, and electric vehicle sectors, with proven technologies and business models leading the clean energy transition in Southeast Asia.
It targets firms in Vietnam, Indonesia, and the Philippines. The three countries account for 75% of the Southeast Asian population and contribute 80% of the region’s greenhouse gases and 90% of the coal project pipeline.
Wallick and Kramer said SEACEF is looking to plug a funding gap in early-stage clean energy projects — a segment into which only a few private capital investors have entered due to the high-risk profile of these investments.
Investors in the clean energy space tend to be large institutional funds like BlackRock and ARA, which plough millions of dollars through their sustainability-focused vehicles.
BlackRock, for instance, was reported by Nikkei Asia earlier this month to be looking to launch a 55 billion yen ($500 million) fund aimed at developing infrastructure for the transportation of green energy in emerging markets.
Closer to home, Swiss infrastructure manager SUSI Partners announced in late May that it has secured a $81 million first close for its Southeast Asia-focused Asia Energy Transition Fund. SUSI Partners is understood to write cheque sizes of about $10-15 million.
SEACEF on the other hand, writes much smaller, seed-stage cheques of around $1-2 million per deal. These are typically in the form of convertible notes and tranched based on the performance of its portfolio firms. Its key performance indicators involve a mix of returns and climate change-focused sustainable development goals (SDG) such as the tonnes of carbon dioxide-equivalent catalysed by its portfolio.
“Private sector appetite still requires early-stage de-risking, which we’re willing to take on given our deep expertise in the clean energy space and unique fund mandate,” said Wallick.
“The SEACEF portfolio is already starting to verify our thesis that small amounts of early-stage capital can provide significant catalytic support for businesses and companies,” said Kramer. “So far 75% of our investees have managed to successfully receive follow-on funding, which is testament to the strength of our model,” he added.
SEACEF has completed four transactions to date, with another five more deals to be closed by end-2021.
Its portfolio firms are Indonesian solar leasing project firm Xurya Daya Indonesia; Vietnamese wind power project firm Levanta Renewables; Philippine wind power project firm Real Wind Energy Inc; and Vietnamese solar and energy storage firm Blueleaf Energy.
Other recent cleantech deals in the Asia Pacific include Norfund and TPG Capital’s RISE Fund’s combined $125 million investment in Hyderabad-based clean energy firm Fourth Partner Energy (4PEL), as well as ADB’s $160.5 million loan to Dau Tieng Tay Ninh Energy Joint Stock Company to support its B.Grimm Vietnam solar power project.
B.Grimm Power is a subsidiary of Thailand’s 140-year old conglomerate B.Grimm Group, and is developing one of Vietnam’s first independent power producer (IPP) renewable energy projects in collaboration with Dau Tieng Tay Ninh Energy.