Alcazar Energy’s second emerging markets investment vehicle has raised an initial $336.6m (€327.5m) from a number of institutions including the European Bank for Reconstruction and Development (EBRD).
EBRD has made a commitment of up to $80m to Alcazar Energy Partners II’s (AEP-II) first close.
The fund was also backed by investors including the European Investment Bank (EIB); EMCAF, a fund managed by AllianzGI and advised by EIB; the International Finance Corporation (IFC) and the Asian Infrastructure Investment Bank (AIIB).
AEP-II’s other investors include the German Development Institution (DEG); the French Financial Development Institution (Proparco); and the Dutch Entrepreneurial Development Bank (FMO).
AEP-II, which focuses on mid-market utility-scale renewable energy project investments, has a $500m fundraising target and a $650m hard cap.
Since 2014, Alcazar Energy’s first vehicle deployed $240m of equity and mobilised total foreign direct investment in excess of $700m into seven solar and wind farms in Egypt and Jordan, the manager said.
Alcazar Energy said AEP-II is expected to mobilise around $2bn of foreign direct investment, including project finance, into emerging markets.
AEP-II’s portfolio will develop over 2GW of clean energy, saving 3.2m tonnes of greenhouse gas emissions per year, generating electricity able to power over one million households, the manager said, adding that the fund has already signed its first memorandum of understanding with the Egyptian Government to invest in a green hydrogen-based ammonia facility with 230,000 tonnes/year capacity powered by a dedicated 1GW renewable energy plant.
Alcazar Energy said AEP-II’s projects will allocate $35m to initiatives tailored to the needs of the communities in which they operate, including women’s empowerment, local skills development, and sustainable-energy-related initiatives.
Daniel Calderon, co-founder and managing partner of Alcazar Energy, said: “The successful first close of AEP-II is a tribute to the disciplined and responsible work of our Alcazar team, who originated, developed, and exited AEP-I’s portfolios, creating value for investors and, most importantly, for the countries and communities where AEP-I invested.
“AEP-II is privileged to have the confidence of an outstanding group of public and private institutions to invest and develop in renewable energy projects, mobilising more than $2bn of foreign direct investment from OECD economies to build sustainable infrastructure where it is needed most.”
Nandita Parshad, EBRD managing director for sustainable infrastructure, said: “We are delighted to scale up renewables to accelerate the green energy transition across EBRD region by committing up to $80m in the new Alcazar Energy Partners II fund.
“This joint investment will strengthen the resilience of financial markets by diversifying funding sources for renewable energy assets. It will also promote female representation in the workforce of the fund’s investees.”
EIB Vice-President Ambroise Fayolle, said: “I am delighted that we are announcing investments from EMCAF and EIB Global in the Alcazar Energy Partners II Fund today. This support will help crowd in further contributions from investors and ensure that the fund plays an important role in accelerating the green transition in its countries of operation.”
Tobias Pross, CEO of AllianzGI, said: “Emerging markets are where the money for climate adaptation and mitigation is needed most and where it will have a much more immediate impact than in developed countries. I am proud that our EMCAF investments are now gaining traction on the ground in emerging countries – not just helping to fight climate change, but to support healthy economic growth in this region.”
Khawaja Aftab Ahmed, IFC regional director for the Middle East, Pakistan, and Afghanistan, said: “We are proud to join forces with our long-term partner Alcazar again. Not only to help accelerate the transition to renewable energy and decarbonise power but to also create thousands of jobs and make energy more affordable in the process.”
Konstantin Limitovskiy, AIIB vice president of investment operations (Region 2), said: “We are excited to be part of AEP II’s first close and a lead investor in the fund. We believe AEP II has the potential to add substantial new renewable energy capacity across the Middle East, North Africa and Turkey and play a significant role in the region’s energy transition.
”This investment is a key milestone for AIIB, as our first climate-focused equity investment in the region. The investment is aligned with AIIB’s key strategic objectives of climate risk mitigation and adaptation, green infrastructure and energy efficiency.”
Monika Beck, member of DEG’s management board, said: “Building and expanding green infrastructure in emerging and developing countries is important to enable sustainable development and contribute to achieving global climate goals. We at DEG are convinced of this. In cooperation with our client Alcazar Energy Partners - an experienced and proven player - we are therefore committed to realizing further renewable energy projects.”
Francoise Lombard, CEO of Proparco, said: “Alcazar Energy II will strengthen Proparco’s already existing renewable energy portfolio. Since 2000, Proparco has financed and invested into 125 energy projects in developing countries representing €3.3bn in financing and 12.9 GW in installed capacity spanning all technologies (solar, wind, biomass, hydroelectric).
”The strategy and the focus of Alcazar Energy II is supporting our goal of developing a low-carbon economy with sustainable development and universal access to energy within the countries where we operate.”
Diana Wesselius, manager, private equity at FMO, said: “FMO is proud to invest in the Alcazar Energy II fund. Through this investment, FMO supports the development of renewable energy in amongst others Egypt, Jordan and the wider MENA and ECA region.
”Alcazar’s investment strategy is committed to SDG 13 (Climate Action) and greatly contributes to reducing carbon emissions. Both priorities are at the core of FMO’s strategy.”
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