Brookfield Asset Management and Alterra Management have announced opening the fundraising for the Catalytic Transition Fund (CTF) with a total corpus of $5 billion that will be invested into clean energy and transition assets in emerging economies, including India.
This is the first dedicated fund investing in transition assets in emerging markets. Alterra Funds have committed $1 billion to the fund corpus and Brookfield will contribute at least 10 per cent of it. The fund’s first close is expected by 2024-end, a release said.
The capital raised will be deployed in target emerging markets, including in South and Central America, South and Southeast Asia, the Middle East and Eastern Europe. “The fund will look to deploy capital in large and emerging markets such as India which have clear targets and policy directives supporting the transition to a net zero economy, strong corporate demand for decarbonisation and areas where Brookfield can leverage its platform capabilities to source and execute opportunities,” the statement said.
Key areas
It added South and Southeast Asia were attractive and key geography of focus for the fund. There was an urgent need to cut emissions and accelerate the climate transition, the statement said, adding that emerging and developing economies outside of China receive less than 15 per cent of global clean energy investment, despite representing nearly one-third of global emissions and often yielding greater emissions reductions per dollar invested than in developed countries.
“Emerging markets will require $1.6 trillion per annum to help achieve their Paris aligned decarbonisation targets,” said Nawal Saini, Managing Director, Renewable Power & Transition, Brookfield Asset Management. “This represents a massive opportunity, especially in countries like India where Brookfield already is a significant player with $3 billion of equity committed over the past 5 years and with its platforms representing an asset pool of over 25 GW,” he added.
He said that Brookfield was well positioned to leverage both its on-ground presence in emerging markets like India and its global transition leadership position to create differentiated opportunities of scale for CTF with attractive risk-adjusted returns.
Since announcing the launch of CTF in December 2023, Brookfield has been focused on developing the investment strategy, identifying an advanced pipeline of potential investments and pre-marketing to potential investment partners.
The first fund in the Brookfield Global Transition Fund series raised a record $15 billion in 2022. In February 2024, the second fund in the series announced a first close of $10 billion and is on track to be larger than its predecessor.
Alterra is the world’s largest private investment vehicle for climate finance. It is committed to deploying $30 billion in climate investments with the goal to catalyse $250 billion with partners by 2030.
