MSEF II

Equity of May 2019

MSEF II is a green infrastructure private equity fund focusing on energy efficiency and renewable energy opportunities in Latin America and the Caribbean.

Amount

€ 8,966,382.00

Type of investment

Equity

Development impacts

  • Private sector consolidation/innovation
  • Fight against climate change and preservation of natural resources

Beneficiary locations

Latin America: Brazil, Colombia

Investment field

Investment Companies & Funds

Activity

Infrastructure fund; renewable energy

Organisation

MSEF II

Investments

MSEF II (MGM Sustainable Energy Fund II) will invest primarily in equity, quasi-equity and mezzanine project finance opportunities in energy efficiency targeted at the commercial, municipal and industrial sectors, that optimize energy consumption and lower equipment maintenance and replacement costs as well as in projects that generate electricity-i.e. electricity, cool air, and/or hot water, from industrial waste or by-products. The Fund will also pursue opportunistically small-scale renewable energy investments at early stage of development.

Structure

The Fund will structure its energy efficiency (EE) investments through self-redeemable contracts that will provide steady and predictable cash flows over a period of years to the Fund. The Fund will create fully owned local SPVs that own the energy efficiency assets. The assets will be transferred to the clients (SMEs mainly) at the end of the contract. The Fund’s offer is an appealing source of finance for local entrepreneurs as no upfront investment is needed and it does not distract a client’s day-to-day operations as the Fund takes care of the EE operations.

Development impacts

  • Private sector consolidation/innovation

    Cutting-edge technology and innovative approaches to resource re-utilization become accessible to a wider market.

  • Fight against climate change and preservation of natural resources

    Investments in energy efficiency and renewable energy will lower GHG emissions and promote the use of alternative sources of energy, contributing to sustainable development.

Made possible through this investment

Thanks to the direct funding from BIO, the following second-line investments have been made possible.

Colanta dairy factory

Colombia

The investment involves the capture of biogas from the water treatment facility at Colanta’s lactose production plant to produce steam, replacing the use of steam produced on-site from a natural gas-based boiler.

Justo & Bueno

Colombia

The investment involves the installation and maintenance of energy efficiency refrigeration equipment for new and existing Mercadería SAS’ stores in Colombia and refrigeration and ovens at SAS' Tostao y Café coffee shops throughout Colombia.

Q-office

Colombia

The investment involves the installation and maintenance of energy efficiency air-conditioning equipment.