GEF Capital Partners, which was spun out of US-based Global Environment Fund in 2018, has roped in another Limited Partner (LP) for its India-focussed clean energy fund.
GEF’s South Asia Growth Fund II (SAGF II) has attracted LP interest from Belgian investment vehicle SDG Frontier Fund. SDG Frontier Fund, a co-investment vehicle that backs third-party funds, and Belgian investment firm targeting developing countries BIO have committed €2 million in the SAGF II.
The SAGF II is a 10-year closed-end investment fund that will invest in energy efficiency and clean energy sectors. It had increased its target size last year to US$200 million, a third more than the original goal.
The fund hit its first close in May 2019 after securing $130 million. This included $115 million from seven European investors including development finance institutions of France (Proparco), the Netherlands (FMO), Sweden (Swedfund), the UK (CDC Group Plc), Belgium (BIO) and Switzerland (SIFEM).
BIO had previously committed €8.7 million to the SAGF II.
The SAGF II is the successor fund of South Asia Clean Energy Fund (SACEF). The first fund closed in 2010 at $128 million. Of this, $5 million was financed by BIO. GEF had teamed up with Yes Bank for its first South Asia vehicle.
The new fund had last year also raised $30 million in commitment from the US International Development Finance Corporation (DFC). The DFC had initially planned to invest $20 million.
The DFC’s commitment had taken the fund’s corpus beyond the original target. The SDG Frontier Fund’s commitment will move the GEF fund closer to its revised target.
A few months ago, GEF had roped in Abhishek Loonker, a former director with private equity firm Ascent Capital, to beef up its India team.
The SAGF II invests mainly in India. But it also looks for opportunities in Bangladesh.
In 2018, the fund made an initial investment in ESDS Software Solution Pvt. Ltd, which sets up data centres based on eco-friendly technologies. In December 2019, it also invested in PVC pipes maker Prince Pipes and Fittings Ltd.
GEF Capital makes investments in the range of $10-40 million in businesses that have an established operating profit of at least $3 million, according to its website.