IFC Catalyst Fund completes $418 million in fundraising

11 July 2014   Category: News, Global   By Maya Ando

The IFC Catalyst Fund has completed US$418 million in fundraising for investing in private equity funds and companies focussed on climate-related investments in emerging markets.

The fund is managed by IFC Asset Management Company (IFC AMC), a wholly-owned subsidiary of International Finance Corporation (IFC), a member of the World Bank Group. IFC AMC serves as an independent manager of third party capital.

The State Oil Fund of the Republic of Azerbaijan (SOFAZ), a $34.2 billion West Asian sovereign wealth fund, has committed $50 million to the fund, while IFC has injected $75 million, with the British government pledging $80 million.

In addition, two private pension funds from Australia and Germany; the governments of Canada and Norway; and the Japan Bank for International Cooperation, have invested $213 million collectively. 

“Addressing climate change is a strategic priority for the World Bank Group, and private equity is a catalytic way to initiate climate-friendly investment in emerging markets,” said Gavin Wilson, chief executive officer of IFC AMC.

“Private equity funds address the gap that companies face in climate-related sectors and help them scale up efficient solutions and business models. IFC’s extensive expertise in emerging markets and its record of success in climate-related investments will provide a unique pipeline of attractive investment opportunities for the fund.”

IFC AMC said that it views private equity and venture capital funds as a unique proposition to finance climate-related investments, as they possess the expertise to back innovative projects, and support early-stage companies by improving their technical and operating capacity.

Shahmar Movsumov, executive director, SOFAZ said: “The Republic of Azerbaijan attaches great importance to the global development agenda. That is the reason that we invest the funds generated through oil revenues in sustainable projects. We value IFC’s experience and track record of working in emerging markets and anticipate our investments delivering significant developmental impact as well as strong financial returns.”

The IFC Catalyst Fund has already made four commitments to funds focussed on climate-related investments, including in renewable energy, cleantech, and industrial biotechnology in Southeast Asia, China, and Latin America.

In light of the growing capital needed to improve the global environment, developed nations are expected to pledge $100 billion per year to boost climate aid to poorer countries by 2020.

Reyaz Ahmad has led the IFC Catalyst Fund as head and chief investment officer since his appointment in 2010.