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Brookfield Asset Management has closed $2.4 billion for its Catalytic Transition Fund (CTF), as it seeks to raise up to $5 billion for deployment towards clean energy and transition assets in emerging markets. These include funds from CDPQ, GIC, Prudential and Temasek.
CTF was previously launched at COP28 with up to $1 billion of catalytic capital provided by Alterra, the world’s largest private investment vehicle for climate finance based in the United Arab Emirates, with the purpose of mobilising investment at scale to finance a new climate economy.
Alterra’s fund commitment has been designed to receive a capped return, thereby improving risk-adjusted returns for other investors in the fund, according to a statement.
Brookfield has committed to provide 10% of the fund’s target to align itself with investment partners and investors.
The partnership is designed to help drive clean energy investment into emerging markets, where investment needs to increase sixfold over current levels to reach the $1.6 trillion required annually by the early 2030s in line with global net zero targets.
CTF is focused on deploying capital into clean energy and transition assets in emerging markets in South and Central America, South and Southeast Asia, the Middle East, and Eastern Europe.
In Asia, FinanceAsia understands that target markets will include Vietnam, Thailand, Indonesia, Malaysia and the Philippines.
The fund expects to announce its initial investments later in 2024, and a traditional first close – with additional capital from Brookfield’s ongoing fundraising efforts through its extensive network of institutional investors – is expected by early 2025.
H.E Majid Al-Suwaidi, CEO of Alterra, said in a statement: “CTF demonstrates Alterra’s catalytic capital as a powerful multiplier of climate finance to the Global South. This early momentum around CTF shows strong global demand not just for climate strategies, but for opportunities to invest in climate solutions in emerging markets.”
Al-Suwaidi said: “Alterra looks forward to working with CDPQ, GIC, Prudential and Temasek and other partners who share our ambitions to redefine how the world invests in climate solutions and go beyond business-as-usual to deliver positive impact for both people and planet.”
Mark Carney, chair and head of transition investing at Brookfield Asset Management, said: “These anchor commitments from CDPQ, GIC, Prudential and Temasek demonstrate significant momentum for the CTF.”
Carney added: “The support from the world’s most sophisticated investors for the CTF strategy underscores the unique combination of the major commercial opportunity and the climate imperative. We look forward to working with other like-minded investment partners to accelerate the transition in these critical and vastly underserved markets.”
Marc-André Blanchard, executive vice-president and head of CDPQ global and global head of sustainability, said: “Globally, around $6.5 trillion will be needed yearly for the energy transition over the next 15 years. It’s a staggering figure, and various partnerships and investments are necessary to accelerate the path forward.”
Don Guo, chief investment officer, Prudential, said: “We believe there is an opportunity to drive scalable positive change in emerging markets through investing in the climate transition. Prudential’s investment in Brookfield’s CTF underscores our belief that responsible investment is not only an environmental imperative but also a significant opportunity for growth in emerging markets.”
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