Brookfield And Alterra Launch Fund To Help Emerging Markets Reach Net-Zero Targets

Brookfield Asset Management and Alterra Management Ltd. have set up a fund to support companies' transition to a net-zero entity in emerging markets, including India.

Brookfield has opened the fundraising for the Catalytic Transition Fund, with anchor commitment from Alterra, a joint statement on Thursday said.

"With the urgent need to cut emissions and accelerate the climate transition, the Brookfield-managed CTF will harness a $1 billion commitment by Alterra funds to catalyse up to $5 billion in total capital for deployment into emerging markets," the statement said.

South and Southeast Asia representation were said to be a key focus for CTF. The fund will target large and emerging markets like India, which have clear targets and policy directives supporting the transition to a net-zero economy, strong corporate demand for decarbonisation, and areas where Brookfield can leverage its platform capabilities to source and execute opportunities.

"Our catalytic capital will be deployed to supercharge investment in emerging markets—wherever we see great potential for delivering meaningful climate impact and positive economic return," said HE Majid Al-Suwaidi, chief executive officer of Alterra.

The investments will also be made in the Middle East and Eastern Europe. At least 10% of the fund’s total capital will be contributed by Brookfield, ensuring that its interests align with investment partners. A first close for CTF is expected by the end of 2024.

Developing economies outside 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, it said.

"The first fund in the Brookfield Global Transition Fund series (BGTF I) raised a record USD 15 billion in 2022. In February 2024, the second fund in the series (BGTIF II) announced a first close of USD 10 billion and is on track to be larger than its predecessor. CTF's first close is expected by the end of 2024," the statement said.

Brookfield plans to use CTF to transition emerging markets in developing economies to more sustainable ecological practices, it said.

"Brookfield is already a leading transition investor in these regions and has first-hand knowledge of the incredible opportunity and impact that is available in these chronically underfunded markets," said Mark Carney, chair and head of transition investing at Brookfield Asset Management.

Emerging markets will require $1.6 trillion per year to help achieve their Paris-aligned decarbonisation targets, it said. This represents a massive opportunity, especially in countries like India where it claims to be a significant player, it said.

"...Brookfield already is a significant player with USD 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 and transition, Brookfield Asset Management.

(Text inputs from PTI)