Brookfield, ALTERRA launch fund to support net-zero transition in emerging markets

Brookfield Asset Management(Brookfield) and ALTERRA Management on Thursday announced the setting up of 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 (CTF) with anchor commitment from ALTERRA, a joint statement said.

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

South and Southeast Asia represent 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.

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. It said the 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.

"The first fund in the Brookfield Global Transition Fund series (BGTF I) raised a record $15 billion in 2022. In February 2024, the second fund in the series (BGTF II) announced a first close of $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.

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Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management, said, "CTF is a private market solution to the global challenge of delivering transition investment to emerging markets. 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."

Nawal Saini, Managing Director, Renewable Power and Transition, Brookfield Asset Management, said, "Emerging markets will require $1.6 trillion per annum to help achieve their Paris-aligned decarbonisation targets. 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 5 years and with its platforms representing an asset pool of over 25 GW.

HE Majid Al-Suwaidi, CEO of ALTÉRRA, said, "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."