Copenhagen Infrastructure Partners (CIP) announced today the launch of Growth Markets Fund II (GMF II), focused on the development of clean energy projects in high growth middle-income markets across Asia, Latin America and EMEA.
CIP said that the fund has a target size of $3 billion, and is anticipated to enable more than 10 GW of new renewable energy capacity.
Christina Grumstrup Sørensen, Senior Partner and founder of CIP, said:
“To reach net-zero, we need to bring affordable, reliable, and clean energy to all parts of the world. With a continuous increase in carbon emissions, successful deployment of large-scale renewable energy is particularly important in high-growth, middle-income countries. This fund will be deploying significant private capital and therefore ensure renewable projects in countries, where it will contribute to growth and job creation and deliver substantial impact in terms of reducing carbon emissions.”
According to CIP, the new launch comes as emissions from middle-income markets are expected to grow dramatically over the coming decades, with renewable energy capacity required to triple by 2030 in order to stay on the path to net zero, driving a need for nearly $2 trillion of investments in clean energy in middle-income and emerging markets alone this decade.
The fund is set to be the largest in the world focused on greenfield renewable energy investments in high growth, middle-income markets, CIP added, with the potential to reduce greenhouse gas emissions by more than 10 millon tonnes annually, and to power more than 10 million homes with clean energy.
The new fund will focus on investments in large-scale and complex greenfield renewable energy infrastructure projects, in areas including offshore and onshore wind, solar PV, energy storage and Power-to-X, and across 15 selected high-growth middle-income markets identified as having strong fundamentals for renewable energy infrastructure investments, with a combination of high economic and demographic growth, as well as an expanding middle class. Selected markets include India, Vietnam, Philippines, Mexico, and South Africa.
Niels Holst, Partner at CIP and Co-Head of GMF, said:
“These middle-income and emerging markets represent not only a mandatory task for the industry – and we believe that they are also very attractive markets for investors seeking exposure to the some of the highest expected growth rates for renewables. They are estimated to account for 25% of global renewable energy capacity by 2050, as economic and demographic growth drives rapidly increasing electricity demand.”
CIP added that the new fund already has ownership in a diversified portfolio of development stage projects representing more than $5 billion in potential commitments, well ahead of the fund’s target size.
Ole Kjems Sørensen, Partner at CIP and Co-Head of GMF, said:
“The fund is off to a good start with a large and diversified portfolio of projects reflecting potential equity commitments of more than USD 5 billion – far exceeding the target fund size. We expect the fund to be a global driver in the green and just transition.”