NDF - Financing for climate change and development projects

ADB Ventures announces successful close of fund to boost climate technology solutions in Asia-Pacific markets

20.04.2020

New NDF-supported fund meets USD 50 million capitalisation target 

A new venture fund approved in January 2020 by the Asian Development Bank (ADB) has made first close on schedule, and met its USD 50 million funding capitalisation target. The ADB Ventures (ADBV) Investment Fund I will support and invest in high-impact early-stage and growth companies with plans to scale in Asia Pacific and technology-driven solutions for climate mitigation, adaptation, and resilience. A minimum of 75% of Fund I investments will also have a strong and measurable gender impact.
 
“Today’s announcement marks an extraordinary first success for this fund,” says NDF Project Manager, Aleksi Lumijärvi, who will be overseeing the fund from the NDF side. “In a fundraising landscape often characterised by delays, I’m excited to see that we are right on schedule and that subscriptions immediately hit capitalisation targets of USD 50 million for the first close."
 
NDF involved from the outset
As the fund’s first committed investor, with a capital contribution of EUR 9 million (~USD 10 million), NDF has already been closely involved for almost one and a half years now in the design and piloting phase. Lumijärvi attributes everything going to plan to the strength of the ADB Ventures team, which has remained focused and targeted in their approach from the outset. 
 
NDF has also committed to investing an additional EUR 1 million into the technical assistance facility linked to the fund, bringing the total NDF investment to EUR 10 million. 
 
“This early-stage involvement as an anchor investor and technical assistance provider exemplifies NDF’s risk coverage mandate, which allows us to take on larger risks than many other financiers by coming in early to test new climate technologies or business models for market readiness, where there is a high risk of an instrument not being implemented,” Lumijärvi explains. 
 
Nordic cleantech opportunity
Being engaged with ADB Ventures from the design phase has also helped position NDF as an active partner in matching ADB Ventures with promising Nordic technology solution providers. The Nordic countries are seen as a cleantech hub, and ADBV has already engaged with a number of Nordic climate-sector companies, venture capital investors, as well as public and private sector incubators.
 
ADBV investor line-up
Initial ADBV investors include Ministry of Foreign Affairs Finland, Clean Technology Fund, Nordic Development Fund, and Ministry of Economy and Finance Korea.
 
What will success look like?
The fund has already been operating in pilot form, so its next steps will be to formalise operational and investment governance structures in preparation for the fund’s first investments. 
 
“The global slowdown linked to corona virus may pose some challenges in terms of mobilising resources,” Lumijärvi says, “but since so much was already done during the design and pilot stage, we expect the fund to hit the ground running.” 
 
The fund is expected to generate returns on investment. However, just as importantly, success will be closely measured and reported on its positive climate and gender impacts, combined with strong contributions to other Sustainable Development Goals in South and South East Asia. 
 
“Now the real work begins,” says Lumijärvi. “It will be interesting to see what kind of climate and gender related growth businesses we will be able to identify, invest in, and help grow in the region.”
 
Written by Laurel Colless
 
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