ADB Invests in Three Climate Change Funds That Seek to Raise $700 Million

The Asian Development Bank is spending $60 million to help set up three venture capital funds developing climate-change technology in China and India, the Manila-based lender said in an e-mailed statement today.

The bank will invest $20 million each into Aloe Environment Fund III, Keytone Ventures II and VenturEast Life Fund III, which may raise an additional $700 million from the private sector, according to the statement.

ADB said it has invested $4.8 billion in clean energy projects in the past three years even as climate mitigation efforts for developing countries may exceed $100 billion a year by 2030. Cost estimates for Asia may be $40 billion a year from now to 2050, it said.

“Climate change will hit Asia hard in coming decades,” Philip Erquiaga, director general of ADB’s Private Sector Operations Department, said in the statement. “Investing in these venture capital funds will help channel finance into innovative and affordable technologies that tackle the challenge of climate change.”

Aloe Fund is targeting to raise as much as 300 million euros ($420 million) and plans to make eight to 10 investments of about 20 million euros each, the ADB said. The $200 million Keytone Fund will focus on technologies for light-emitting diodes, industrial energy efficiency, electric vehicle and power batteries, and will make around 15 investments of $10 million to $15 million each.

VenturEast Fund may invest $200 million in India, making minority investments of $5 million to $15 million in 15 to 18 companies, according to the ADB.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net