Brookfield, Alterra Management launch climate fund to raise up to $5 bn

Canadian fund manager Brookfield Asset Management Ltd has launched a new climate action fund, partnering with Alterra Management Ltd, the world's largest private investment vehicle in this domain. The initiative aims to raise up to $5 billion to boost spending in emerging markets.

The new Catalytic Transition Fund (CTF), managed by Brookfield, will receive $1 billion from Alterra and channel a total of $5 billion towards climate transition assets and clean energy investments in various emerging markets, according to a Brookfield statement on Thursday.

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Since December 2023, Brookfield has been identifying potential partners, marketing the fund, and creating an investment plan with Alterra. 

Alterra, born during COP28—the United Nations Framework Convention on Climate Change (UNFCCC) environmental summit—started with a $30 billion commitment from the government of the United Arab Emirates (UAE). It aims to fund climate action in developing countries and emerging markets.

"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 five years and with its platforms representing an asset pool of over 25 GW," said Nawal Saini, managing director, renewable power & transition, Brookfield Asset Management.

These assets will fund decarbonization and energy transitions in Southeast Asian economies, with a key focus on India. Brookfield highlighted India's clear policies supporting the transition to a net-zero economy and a strong corporate demand for decarbonization as attractive factors. This fund will supplement India's goals of generating half the country's electric power capacity using green energy by 2030 and achieving net-zero carbon emissions by 2070.

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In addition to India, the fund will deploy capital to other emerging markets, including South and Central America, South and Southeast Asia, the Middle East, and Eastern Europe, according to the press release.

The CTF, the latest addition to Brookfield's $925 billion assets under management (AUM), aims to promote equality in climate action between developing and developed nations. 

"Emerging and developing economies outside of China receive less than 15% 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," the statement said.

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