GEF Capital closes $200 million climate fund as CDC, IFC, others chip in

Private equity firm GEF Capital Partners - focused on climate investing - has raised nearly USD 200 million from British CDC Group, IFC and Dutch investment firm FMO, among others, to close its South Asia Growth fund II.

The other investors include European Investment Bank, Proparco, Swedfund, the US Development Finance Corporation and BIO, the city-based firm said in a statement on Tuesday.

It is a growth equity fund targeting climate-themed businesses in South Asia with a focus on India. It has already deployed over two-thirds of its commitments in several sector-leading companies, including Prince Pipes in the water conservation sector, SeedWorks in the hybrid climate-smart agricultural seeds sector, Premier Energies - an integrated solar cell and module manufacturer, Syrma SGS in manufacturing energy-efficient electronic devices and components, and 3SC - a supply chain decarbonisation analytics and solutions provider, it said.

The fund was anchored by a large commercial asset management firm headquartered in Europe, and builds on a USD 125 million predecessor fund that was led by key GEF team members, according to Raj Pai, one of the founders and managing partner at GEF Capital. Climate growth investing is not just about achieving a positive environmental impact but also acts as a powerful operating and risk-mitigation theme, he said.

Sridhar Narayan, co-founder and managing partner, said the climate sector presents an investment opportunity of more than USD 1 trillion in South Asia alone. The fund's investments are geared to support climate mitigation, adaptation, circular economy and resource efficiency.

In particular, the fund will target a diverse set of companies along the resource-efficient supply chain with a focus on clean energy supply chain, energy efficiency technologies and services, efficient use of water resources and environmental products and services, he said. GEF Capital was formed in March 2018 following a collaborative spinout from the Global Environment Fund, a pioneer in global sustainability and environmental investing.