CFM's Climate Investor Two fund closes at over $1bn
Climate Fund Managers announced the final close of its second blended finance facility.
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Climate Fund Managers (CFM) announced the final close of its second blended finance facility, Climate Investor Two (CI2), at $1.065 billion. With new commitments of $190 million plus a €205 million EFSD+ guarantee from the European Union, CI2 surpassed its initial $1 billion target.
The fund blends public and private capital to invest in and co-develop water, waste and oceans infrastructure in emerging markets, including low-income countries, across Africa, Asia and Latin America.
Andrew Johnstone, CEO of CFM, said: “While climate mitigation remains critical in the race to end the climate crisis, adaptation must be an equal priority. Closing Climate Investor Two at more than $1 billion in a challenging environment is a major milestone that highlights investor appetite for adaptation and our ability to structure compelling opportunities in this space. With the support of Sanlam Investments and the European Union, we have been able to pioneer the new Bridge-to-Bond mechanism, opening access to climate finance for a much broader group of investors.”
Mark Moorhouse, executive head infrastructure finance at Sanlam Alternative Investments said: “As a sustainability-driven asset manager, our purpose is to create long-term sustainability for investors – but also for future generations and our planet. We leverage strategic partnerships to create bespoke opportunities for clients, ensuring that our global reach translates into meaningful, customised investment experiences. Our partnership with CFM since 2017, enables us to respond to the world’s urgent climate crisis, particularly in developing economies. We are proud to have facilitated this innovative and landmark financing model for the close of CI2 and look forward to the impact these funds will have for those who need it most.”
CI2’s blended finance structure enables investment across the project lifecycle from development to construction. The facility comprises a Development Fund, providing concessional capital and expertise for early-stage project development to reduce risk, and a Construction Equity Fund, a tiered facility accommodating both public and private investors’ risk-return profiles during asset build-out.
Since its first close in 2021, CI2 has committed $339 million to 25 climate adaptation and mitigation projects across Africa, Asia and Latin America. These include water supply and distribution projects in Vietnam and the Philippines, water desalination projects in Thailand and Kenya, waste-to-energy platforms in Sierra Leone, South Africa and Thailand; and the world’s largest debt-for-nature swap in Ecuador to secure long-term funding for the Hermandad Marine Reserve and the Galápagos Islands.
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