Johanna Klein, investment officer at the capital markets and financial sectors division at ADB, said its role has been to identify these funding constraints and address them with their own and private sector funding.
‘One of the biggest gaps in the market has been investment into clean energy private equity,’ she said at a London-based conference today. ‘We try to find funding constraints in the market. The ADB began to address this sector in 2002 when the problem was very evident. People didn’t have the confidence that cleantech private equity was a money maker.’
In 2006, the bank launched a call for proposals hoping to catalyse investment from private fund managers. Although these efforts were initially hampered by the sudden onslaught of the financial crisis, Klein said 80 per cent of the $100m it invested into the five chosen funds has proved successful.
‘We saw every disaster you can imagine befall these five funds. Four of the five got off the ground and become operational.’
The multilateral development bank has now launched a second call for proposals and in the coming weeks will announce which three funds have been selected to each receive $20m.
‘There is still a gap where money is not going into early stage, tech-focused venture capital funds,’ she said.
Although the ADB received 38 proposals – with lots of experienced investors looking to morph’ their strategy to better focus on the Asian cleantech sector – Klein said there is still a need to stimulate investment into South-East Asia frontier countries.
‘We did not receive one proposal for a clean energy fund focused on South-East Asia. I think over the next six month to 12 months we are planning to assess what types of intervention here may be appropriate.’