OPIC invests $505m in clean energy(2)

The US government agency has made its largest renewable energy investment to date via commitments to to six global private equity funds including Middle East & Asia Capital Partners and US Renewables Group.

Overseas Private Investment Corporation, a US government agency, has approved $505 million (€346 million) in commitments across six private equity funds, which together are targeting a total of $1.6 billion for investment in clean and renewable energy projects in emerging markets.

OPIC’s investment is its largest to date in the renewable sector.

OPIC committed $50 million to Middle East & Asia Capital Partners Clean Energy Fund II, which is targeting $150 million for projects in India, Indonesia, Malaysia, Pakistan, the Philippines, Thailand and Vietnam. The fund will invest in equity, convertible debt and mezzanine debt. Fund II is being raised in parallel with the Singapore- and Indonesia-based private equity firm's first fund, which is targeting $250 million. Fund II will invest alongside Fund I on investments that qualify for OPIC support.

GEF Management Corporation, a US private equity firm focused on cleantech, emerging markets and sustainable forestry, has received a $100 million commitment for a South Asia fund targeting $300 million. The fund plans to invest 75 percent of its capital in India. GEF previously managed two OPIC funds investing in global infrastructure related to clean energy and water.

OPIC has committed $55 million to the fourth FE Global Clean Energy Services Fund targeting $250 million. FE Clean Energy Group is a US mid-market cleantech private equity firm that seeks to generate tradable carbon credits. The fund will invest in renewable energy and emission reduction projects in Asia, Central and Eastern Europe and Latin America. More than 50 percent of the fund's capital is earmarked for Asia with a focus on India, Malaysia, Philippines and Thailand.

The US Renewables Group, a US renewable power-focused private equity firm, has received a commitment of $100 million to be co-invested in the emerging markets alongside the firm's third power and biofuels fund. Its second fund closed on $475 million in 2007.

OPIC committed an additional $200 million to two undisclosed funds.

OPIC’s mission is to help US businesses invest overseas and foster economic development in emerging markets. The agency supports the creation of private equity funds and also provides political risk insurance and loan guarantees to US companies with overseas operations.