8.1 Breakdown of ACP’s committed capital, by source

investors, thereby unlocking significant financial resources for further investments in the sector and region.

Of ACP’s US$450 million AuM, US$200 million was provided by its founding partners, US$94 million by the UK government, and the remainder by a mix of public and private investors. The fund’s management estimates that about 35 percent of the capital is private.2 ADB alone contributed US$100 million (see figure 8.1). Other investors include the Japan International Cooperation Agency, the Japanese commercial bank Bank of Tokyo Mitsubishi-UFJ, the Japanese insurance company Sompo Japan, and the Japanese infrastructure developer Pacific Consultants Co.

The UK government invested through its Climate Public Private Partnership Program (CP3), which aims at demonstrating to private investors that investing in low-carbon and climate-resilient companies in developing countries is not only ethically right but also commercially viable. Through this demonstration CP3 aims to catalyze new sources of capital, such as pension and sovereign wealth funds, for climate adaptation and mitigation. CP3 targets the renewable energy, water, energy efficiency, waste management and recycling, sustainable agriculture, and forestry sectors in developing countries. ACP is one of two funds in which CP3 invested.3 CP3 is a joint initiative of the UK Department for International Development and the Department for Business, Energy & Industrial Strategy, which contributed a joint investment of US$94 million to ACP. The two departments are not just investors; they also play an active role in the fund’s limited partners advisory committee, and set out certain requirements in a side letter of the fund’s limited partnership agreement (LPA) (see figure 8.2). They undertake quarterly and annual monitoring of ACP and have appointed a consultant to provide reports.

As a first-time fund with no previous track record, ACP struggled to raise capital from international pension funds and institutional investors. It initially aimed for total AuM worth US$750 million. Even with backing from three

FIGURE 8.1

Breakdown of ACP’s committed capital, by source

Others 35% ADB 22%

Orix/Robeco 22%

DFID 21%

Source: ACP management. Note: ACP = Asia Climate Partners; ADB = Asian Development Bank; DFID = UK Department for International Development.