Investment to accelerate the energy transition in Southeast Asia

On December 22, 2023, Swedfund invested 12 MUSD in Southeast Asia Clean Energy Fund II (SEACEF II). This investment will contribute to providing scale-up capital to early-stage companies focused on advancing the low-carbon transition in some of Southeast Asia's most fossil fuel-intensive economies.

While Southeast Asia is expected to experience robust mid-term growth, many of the countries face challenges in meeting their emission reduction targets due to their heavy reliance on fossil fuels. The renewable energy sector in the region also suffers from a significant funding shortage, hindering the development of bankable projects.

By investing in SEACEF II Swedfund will support an accelerated low-carbon transition, as well as contribute to sustainable economic development, and reduced inequalities in rapidly growing, fossil fuel-intensive economies like Indonesia, Vietnam, and the Philippines.

SEACEF II has a focus on addressing the early-stage and scale-up financing gap for businesses and projects involved in renewable energy generation, efficiency, and CO2 emissions reduction.

Development Finance Institutions like Swedfund and blended finance vehicles such as SEACEF II play a key role in mobilising private funds, especially for projects in early stages, newer technologies like energy efficiency and storage.

- By investing in SEACEF II Swedfund has the possibility to support the development and the scale-up of companies which are central when setting the stage for an accelerated low-carbon transition and sustainable and inclusive development Southeast Asia, says Gunilla Nilsson, Investment Director Energy & Climate at Swedfund.

In addition, the investment in SEACEF II will contribute to cleaner, more affordable, and efficient energy usage while reducing emissions in the region. The companies that the fund will invest in are predicted to support climate mitigation, adaptation, resilience, inclusive development, and sustainable growth.

Swedfund is expected to be additional both via its role as first close investor and by its support on strategic, environmental and social issues. Swedfund will also have the opportunity to strengthen the ESG performance of underlying portfolio companies, including improvements related to labour issues, climate, biodiversity, gender and human rights.

The fund manager, Clime Capital Management, is a Singapore-based 2X eligible manager with a clear impact and additionality commitment. Swedfund will invest alongside the development finance institutions FMO, British International Investment (BII) and Norfund as well as Australian Development Investments (an Australian Government initiative), Allied Climate Partners (ACP), the International Finance Corporation (IFC), a member of the World Bank Group, and Global Energy Alliance for People and Planet (GEAPP).