Swedfund, Sweden’s development finance institution, has made an incremental commitment of MUSD 5 to Renewable Energy Asia Fund II (REAF II) and further strengthened its contribution to the build-out of renewable energy in developing Asian countries.

Swedfund’s strategy is to contribute to increasing renewable energy generation in our countries of operation. There is a strong link between access to sustainable energy and economic development, and development finance institutions have an important role to play.

In July 2017, Swedfund made an initial commitment of MUSD 10 to Renewable Energy Asia Fund II. During the autumn, we had, thanks to the fund’s advanced pipeline, paid out a substantial portion of our funding and agreed to increase our commitment in order to enable the construction of additional renewable energy capacity in the fund’s target countries. REAF II, which held its final close on November 30, has total commitments of MUSD 203 from both private and public investors.

The paradox in many developing countries is that – despite an abundance of technically feasible projects with attractive potential returns – relatively few renewable projects are actually built. One tangible way of addressing this is to finance developers that are able to take a project from pre-development to financial close and then on to operation. The manager of REAF II, Berkeley Energy, is one such developer, focussed on implementing small- and medium-sized renewable energy projects in a sustainable and impactful way. The fund is effectively a vehicle through which Swedfund can deliver on its goal of supporting the build-out of renewable energy in developing markets.

REAF II has so far invested into eight projects which it has developed to an advanced stage and which focus on hydro, wind and solar in the Philippines, India and Indonesia. This augurs well for the Fund’s ability to meet expectations with respect to Swedfund’s three pillars of Impact on society, Sustainability and Financial viability.