Soros Economic Development Fund commits $25m to Allied Climate Partners
Allied Climate Partners seeks to increase the number of bankable climate projects in emerging markets.
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The Soros Economic Development Fund (SEDF), the impact investment arm of the Open Society Foundations, is committing $25 million to Allied Climate Partners (ACP) – a new public-private partnership focused on increasing the number of bankable climate projects in emerging markets.
ACP aims to address a critical financing gap at the early, risk-oriented stages of the development process. Without this support, many projects and businesses struggle to attract the necessary capital to achieve their climate-related goals. While early-stage project development represents the smallest portion of the overall funding needed for a project (approximately 5%), relatively few early-stage projects get financed due to risk. Even though 5% of the capital can unlock 95%, this early-stage capital is the hardest to raise for critical activities like technical and environmental assessments, modeling, permitting, and land acquisition.
Using funds from SEDF and other philanthropic investors, ACP will anchor a number of regional funds in Southeast Asia, Africa, Latin America and the Caribbean, and India with $235 million first-loss junior equity. These regional funds will in turn seek to raise an additional $600+ million in senior equity from multilateral development banks (MDBs), development finance institutions (DFIs), and private investors.
ACP has strategic partnerships with a number of leading MDBs and DFIs, including the International Finance Corporation (IFC), a member of the World Bank Group, U.S. International Development Finance Corporation (DFC), British International Investment (BII), the U.K.'s DFI and impact investor, the African Development Bank (AfDB), Proparco, a subsidiary of Agence Française de Développement Group, FMO, the Dutch Entrepreneurial Development Bank, and IDB Invest, a member of the Inter-American Development Bank Group.
Georgia Levenson Keohane, CEO of the Soros Economic Development Fund said, “This innovative SEDF investment builds on Open Society’s broader work to support the mobilisation of development finance and commercial capital critical for financing a just climate transition in the Global South.”
ACP recently announced the anchoring of its first regional fund – the Southeast Asia Clean Energy Fund II. Managed by Clime Capital, the fund is targeting at least $135 million to invest in projects in Vietnam, Indonesia, and the Philippines – countries that account for about 75% of the region’s population and 60% of current regional greenhouse gas emissions.
“We urgently need innovative blended finance solutions that can operate at scale,” said Ahmed Saeed, CEO of ACP. “ACP welcomes SEDF’s commitment to join this exciting endeavor to leverage the power of philanthropic funding.”
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