A Latin American renewable energy fund is on the cusp of its first close, having attracted a $30 million loan from the Inter-American Development Bank (IDB).
The Emerging Energy Latin America Fund II, operated by Connecticut-based asset management firm Emerging Energy & Environment (EE&E), has raised a total of $51 million in equity investments in addition to the $30 million IDB loan.
The fund is hoping to make its first close this week, senior managing director John Paul Moscarella told Environmental Finance, ahead of a final close at $150 million-250 million one year from now.
The fund has commitments from the International Finance Corporation ($20 million), the European Investment Bank ($18 million) and Latin American development bank CAF ($10 million), together with $3 million from EE&E’s staff.
“We are going after private sector investors now,” said Moscarella, describing the fundraising environment as “incredibly hard”.
The fund will make equity investments in developers of renewable energy projects and is targeting “infrastructure-like returns”, he said. It will focus on developers with portfolios of small hydropower, solar and wind energy projects in countries including Mexico, Brazil, Peru, Chile and maybe Colombia.
A small portion of the fund may be invested in energy services companies that support renewable energy or energy efficiency.
This second fund follows Moscarella’s first $25.2 million clean-tech fund, which he initiated while at Econergy, a developer of renewable energy and emissions reductions projects that he co-founded. After Econergy was acquired by Suez Energy South America in 2008, Moscarella bought back the fund.
This fund made seven investments, of which one has been partially exited. He said four of these investments are going “very well”, notably Neogás, a Brazilian supplier of compressed natural gas, while two are going “not so great”. Continue reading more…