Japan commits $20 m to South Asia Clean Energy Fund

The Japan Bank for International Cooperation (JBIC) has committed to contributing $20 million to the South Asia Clean Energy Fund, a fund created by the Global Environment Fund of the World Bank and the Yes Bank.

This is the second major contribution that the South Asia Clean Energy Fund (SACEF) is receiving, after OPIC's $100 million. The SACEF, which intends to create a corpus of $300 million, plans to invest in green energy projects in South Asia, with focus on India.

In its evaluation, OPIC had noted that the SACEF would have “a high development impact” on Asia. The Fund, it said, would invest in equity, mezzanine debt and convertible debt of small and medium enterprises across Asia in solar, wind, hydro, biofuels, natural gas, batteries and green information technology.

The SACEF generally seeks “significant minority equity positions and prefers to share a majority or controlling position in combination with another financial or strategic minority investor,” OPIC papers say.

By taking management positions in project companies, the Fund will transfer its expertise in clean energy to host country enterprises, and control strategic decision-making. Over time, the Fund's investments may lead to a reduction of greenhouse gas emissions in countries that currently suffer from high levels of pollution.

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