First-of-its-Kind Investment Helps Bridge Financing Gap for Small-and-Medium-Sized Enterprises in Renewables Sector
In a first-of-its-kind private credit fund financing, the Asian Infrastructure Investment Bank (AIIB) has approved a USD100-million investment into the ADM Capital Elkhorn Emerging Asia Renewable Energy Fund targeting small and medium-sized enterprises (SMEs) and projects operating in the renewable energy and energy efficiency sectors across emerging economies in Asia.
The fund opens the door to renewable energy and energy efficiency projects in emerging Asia to make it easier for them to secure financing to help get their projects off the ground. Smaller companies and projects in this industry face a financing gap because larger banks and financial institutions do not traditionally provide them loans due to their size, complex risk profile and their need for a structured financing solution.
“Our participation in this fund demonstrates to potential institutional investors the compelling opportunities in financing smaller companies working in the renewables sector in emerging Asian countries,” said AIIB Director General (Banking) Dongik Lee.
He added that given the fund’s focus, the investment is also in line with AIIB’s target of investing 50 percent of its annual direct financing into projects that support climate change mitigation or adaptation by 2025. The fund, which has a target size of USD500 million, is expected to improve electricity access and security, promote energy efficiency and help reduce the carbon intensity of electricity supply of AIIB’s regional members.
“We are excited to be partnering with AIIB, mobilizing capital for the region’s entrepreneurs in their bid to deliver modern and essential renewable energy solutions,” said Chris Botsford, Co-founding Partner and Joint Chief Investment Officer of ADM Capital. “ADM Capital’s experience across the credit spectrum, its attention to ESG and years of engagement with the region’s entrepreneurs, corporates, governments, non-governmental organizations and financial institutions, positions the firm to support Asia’s transition to renewable energy.”
Climate finance accounted for 39 percent of total financing approved by AIIB in 2019, up from 35 percent over the previous three years combined.
Additional information about the ADM Capital Elkhorn Emerging Asia Renewable Energy Fund Project can be found here.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 103 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.