British International Investment ventures into Southeast Asia

May 24, 2023 | 16:29
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In a bold move towards advancing sustainable development, British International Investment (BII), a UK development finance institution and impact investor, unveiled a $15 million commitment to the SUSI Asia Energy Transition Fund (SAETF) on May 22.
British International Investment ventures into Southeast Asia

Managed by the Swiss-based firm SUSI Partners, SAETF is a visionary energy transition infrastructure fund centred on Southeast Asia, including Vietnam.

BII's foray into this region marks a pivotal moment as the institution strives to re-engage with Southeast Asia and provide vital investment capital to bolster clean and sustainable economic growth while supporting the region's profound shift towards green energy.

BII joins a group of development finance institutions, including AIIB, FMO, Swedfund, Norfund, and OeEB, as well as other private investors, in lending their unwavering support to SAETF.

This investment signifies the initial step in realising BII's ambitious plan to channel up to £500 million (around $620 million) of climate finance into the Southeast Asian region. Furthermore, it aligns seamlessly with BII's overarching objective to direct 30 per cent of its new commitments towards climate finance.

SAETF is purposefully designed to target infrastructure investments across the energy transition spectrum, encompassing renewables, efficiency, and storage projects.

The fund primarily focuses on emerging economies in Southeast Asia, such as Indonesia, Vietnam, and the Philippines.

To address this soaring energy demand and curtail dependence on fossil fuel generation, six Southeast Asian nations, including Indonesia and Vietnam, have boldly announced their commitment to achieving net-zero emissions and carbon neutrality targets.

Meeting these ambitious sustainability goals necessitates an estimated $200 billion investment in the energy sector by 2030, with over three-quarters of the funding earmarked for clean energy initiatives.

Collaborating with SUSI Partners, SAETF benefits from the expertise of a specialised investment manager renowned for its successful global investments across the full range of energy transition infrastructure projects.

SUSI Partners has already made four strategic investments on behalf of SAETF, including joint ventures dedicated to expanding rooftop solar photovoltaic assets in partnership with Singapore-based Entoria Energy, financing and operating energy efficiency projects across Southeast Asia with Malaysian firm InvestEnergy, and developing utility-scale renewable energy projects with regional developer Pacific Impact in countries like Indonesia, Vietnam, and the Philippines.

In late April, SUSI Partners announced an investment in Asia Clean Capital Vietnam, a solar developer catering to commercial and industrial customers in Vietnam. These investments seamlessly align with BII's renewed commitment to climate finance in Southeast Asia.

As a leader in the development of clean energy solutions in Asia, Asia Clean Capital helps international and domestic firms decarbonise their energy supply and meet both internal and transnational environmental, social and governance targets.

Srini Nagarajan, managing director and head of Asia at BII said, “We have been investing across Asia for over 30 years. SAETF is an excellent re-entry point for BII into Southeast Asia and a clear statement of our ambition to provide climate finance and support innovation to meet the challenges of the climate crisis. We laud the region’s climate ambitions and look forward to collaborating with SUSI’s local teams to further develop scalable and bankable projects.”

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