India-focused South Asia Growth Fund II marks first close at $130m

South Asia Growth Fund II (SAGF II), which is focused on supporting businesses promoting energy and water efficiency in India and Bangladesh, has reached the first close at $130 million.

Seven European development finance institutions (DFIs) have together invested about $115 million in Global Environment Fund’s SAGF II. UK’s CDC Group has anchored the fund with $25 million investment, it said in a statement.

Apart from CDC, those who have contributed to the fund include Belgian Investment Company for Developing Countries, European Investment Bank, Netherlands’ FMO, France’s Proparco, Swiss Investment Fund for Emerging Markets, and Swedfund International.

The fund will be managed by GEF South Asia Advisors in India, a spin-out out from the U.S. based Global Environmental Fund Capital Advisors, CDC said.

The South Asia Growth Fund II (SAGF II) will invest in businesses promoting cleaner sources of energy and industrial production, efficient utilisation of energy and materials, and sustainable management of natural resources in South Asia, Proparco said in another statement.

SAGF II will mostly target companies operating in India but may also invest in similar companies in Bangladesh, it added.

Moreover, the SAGF II investment team will build on the experience gathered from the South Asia Clean Energy Fund, which was launched in 2010 and now benefits from a strong track record on climate change mitigation.

Invested companies will also benefit from the investment team’s commitment to promoting the best environmental, social, governance and management practices, the statement said.