SUSI Asia Energy Transition Fund

Equity : May 2023

BIO invests USD 7 M in the SUSI Asia Energy Transition Fund, a private equity infrastructure fund focused on Southeast Asia.

Amount

$ 7,000,000.00

Type of investment

Equity

Development impacts

Local economic growth
Private sector consolidation/innovation
Fight against climate change and preservation of natural resources

Beneficiary locations

Asia: Cambodia, Indonesia, Philippines, Vietnam

Investment field

Investment Companies & Funds

Activity

KK.64.301 Infra Fund

Organisation

SUSI Asia Energy Transition Fund

Website

https://www.susi-partners.com/

Domicile

Luxembourg

Southeast Asia's population growth and the accompanying industrialisation and urbanisation has led to an increased demand for electricity and electrification. The region's energy demand is expected to double by 2040, with an annual growth rate of 4%. In response, and to reduce dependence on fossil fuel, most countries in Southeast Asia have set renewable energy targets and adopted national renewable energy policies.

Susi Partners, a Swiss fund manager, established the SUSI Asia Energy Transition Fund (SAETF) to address the need for sustainable energy infrastructure. The fund targets infrastructure investments across the energy transition spectrum, including renewable energy, energy efficiency, energy storage and microgrid projects in Southeast Asian developing countries.

The SAETF’s final closing took place in May 2023 with a BIO commitment of USD 7 million; BIO joined other development finance institutions and private investors that committed to the fund in an earlier phase.

BIO’s rationale to join the fund is based on the fund’s contribution to climate mitigation via its investments in clean energy projects. In addition, the fund manager is strongly committed to E&S and sustainability and as such will promote best practices in the target region. The fund will also finance small sized projects spanning various technologies and countries that BIO wouldn’t be able to finance directly.

Development impacts

Local economic growth
Access to long-term financing for energy infrastructure projects. At least 50% of invested capital should be allocated in LDC, LIC, LMIC.

Investments in projects at development and construction phase with a holding period of 5-7 years.

Infrastructure projects encouraging the adoption of clean energy sources and with substantial direct, indirect and induced effects on GDP and employment
Private sector consolidation/innovation
Established platform with extensive experience in European energy markets, expected to be able to leverage its experience with Renewable Energy (RE) and Energy Efficiency (EE) technologies and to bring them to the target region.
Fight against climate change and preservation of natural resources
Investments in renewable energy, energy efficiency and energy storage projects will reduce GHG emissions and directly contribute to climate mitigation.

The Fund’s management system will track renewable energy generation, energy savings from the fund activities and many more KPIs, in line with the World Resources Institute’s Greenhouse Gas Protocol and the recommendations by the Partnership for Carbon Accounting Financials.

E&S Impact

An E&S action plan has been agreed on with first close investors and includes items around the E&S management system (ESMS) and the external grievance mechanism, E&S capacity building, gender, climate impact reporting, and anti-corruption.

BIO and the Fund Manager have agreed to add to the E&S Action Plan items relating to

mitigating the risk of forced labour and gender-based violence and harassment in the supply chain
physical climate risk assessment
the implementation of the ESMS in case of an internal ESDD
improving the representation of women at Fund and investee level.

Situation at the time of investment

The Fund has a Sustainability Policy in place, as well as an adequate ESMS that describes the E&S procedures from early identification stage through to investment, portfolio management and exit. In addition, they have an external grievance mechanism (both at fund and portfolio company level) and a Responsible Procurement Policy, which articulates how they aim to integrate ESG considerations into the procurement practices of the Funds’ investments.

The Fund Manager has appointed a dedicated E&S Manager, whose main responsibility is the ESMS implementation for the Asian Fund.

Risk Category: A