Partnering for Transactions in Indonesia & Asia

The Asian Development Bank (ADB) will provide a loan of up to $50 million, supported by the Clean Technology Fund, to share risks with the private sector during the project development and exploration phase of the Rantau Dedap geothermal project inIndonesia. The ADB also announced it is forming Asia Climate Partners (ACP) with ORIX Corporation (ORIX) and Robeco Institutional Asset Management B.V. (Robeco)  to undertake commercially-oriented private equity investments across a variety of environmentally supportive, low-carbon transactions throughout Asia. Read More

Innovative ADB Loan to Help Unlock Indonesia’s Clean Energy Potential

22 July 2014

MANILA, PHILIPPINES – The Asian Development Bank (ADB) will provide a loan of up to $50 million, supported by the Clean Technology Fund, to share risks with the private sector during the project development and exploration phase of the Rantau Dedap geothermal project in Indonesia.

“This innovative loan demonstrates the depth of ADB support for deploying clean energy technologies that can significantly displace coal and oil-fired power,” said Lazeena Rahman, Investment Specialist in ADB’s Private Sector Operations Department. “In addition, it will help unlock Indonesia’s geothermal potential by bridging a key financing gap in the market.”

Indonesia has an estimated 29,000 MW of geothermal resource potential, but less than 5% of this potential has been developed. Proving commercial viability for a geothermal project requires a much higher upfront investment than for any conventional fossil fuel project. As such, the lack of an early-stage risk sharing option remains a fundamental obstacle to geothermal power expansion not just in Indonesia, but globally.

The Rantau Dedap project is located in South Sumatra. During this initial phase, the project will conduct the geothermal resource exploration involving the drilling and testing of wells. If developed to the targeted capacity, the project is expected to be able to support at least 240 MW of geothermal power generation capacity over 30 years and an estimated net reduction in carbon dioxide emissions equivalent to 1.1 million tons per year.

The project will be implemented under a 35-year geothermal operating license, a 30-year energy sales contract with Perusahaan Listrik Negara, the national electricity utility company, and a business viability guarantee from the Ministry of Finance.

The borrower, Supreme Energy Rantau Dedap, is a special purpose vehicle established in Indonesia to explore and develop the geothermal resources, and to construct, operate, and maintain the completed power plant and facilities. The shareholders of the project company are GDF Suez, Marubeni Corporation¬ and Supreme Energy.

A core ADB objective is to address the risks and mitigate the impacts of climate change in developing member countries in Asia. The loan follows ADB’s $350 million financing for the landmark 320 MW Sarulla Geothermal Power Development Project, which reached financial close earlier this year, also supported by the Clean Technology Fund.

New Joint Venture Established for Private Equity Investments in Climate-Related Transactions Throughout Asia 

From ADB 4 August 2014

MANILA, PHILIPPINES – The Asian Development Bank (ADB), ORIX Corporation (ORIX) and Robeco Institutional Asset Management B.V. (Robeco) today announced the formation of Asia Climate Partners (ACP), a joint venture that will undertake commercially-oriented private equity investments across a variety of environmentally supportive, low-carbon transactions throughout Asia.

ACP, which will be capitalized initially by $400 million from its founding partners, will be based in Hong Kong, China. It will be staffed by a team of experienced private equity investment professionals, and dedicated to investing in renewable energy, clean technology, natural resource efficiency, water, agriculture, forestry and other climate-friendly companies and transactions that are structured to generate market-driven, risk-adjusted returns and have a positive environmental and social impact.

“We believe that ACP provides an innovative platform to deploy capital into climate-related transactions across Asia that are designed to generate attractive returns,” said Todd Freeland, Director General of ADB’s Private Sector Operations Department.

He added, “ACP will benefit from the combined strengths of Robeco as a global asset manager and ORIX and ADB, which are two of the most active and successful investors in the low-carbon sector in Asia. The substantial resources that the founding partners are committing to ACP will help position it as the preeminent investor in this asset class in Asia from day one, and represents a clear signal of the depth of our collective belief in the investment strategy and its return potential.”

Asia’s economies are among the fastest growing in the world, and are faced by some of its most significant environmental challenges including poor air and water quality, inadequate and unreliable supplies of energy, and inefficiencies in the utilization of existing supplies of energy and other natural resources. Given increasing public and private sector focus on these challenges, and the historically low levels of capital deployed in these areas, investment in renewable energy and resource efficiency has the potential to grow at 2-3 times economic growth in Asia over the next several decades.

“I am delighted that ADB has chosen Robeco to act as investment manager of this exciting joint venture platform,” Leni Boeren, member of the Management Board of Robeco said. “This is a milestone in our successful cooperation with ORIX and is further evidence of our growing commitment to creating attractive new investment opportunities in Asia for our institutional investor partners around the world. We believe that our recognized expertise as investors in resource efficiency, sustainability and private equity will contribute significantly to the ultimate success of ACP.”

“ORIX has established an extensive network through more than 40 years as an active investor, owner and operator of businesses throughout Asia,” Yuichi Nishigori, Corporate Senior Vice President at ORIX, said. “The energy and environmental sectors are core components of our business strategy, and our investment of capital and people into ACP represents a continuation of our commitment to being a leader in this field. Asian countries are in need of securing rapid and sustainable economic growth and must satisfy the ever-increasing needs of their people for a higher living standard and quality of life. This initiative will contribute to providing necessary capital for Asian economies to meet such demands.”

About ADB

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive, environmentally sustainable economic growth and regional integration. Between 2011 and 2013, ADB mobilized nearly $10 billion in climate-related financing, and its total financing volume over this period was in excess of $64 billion, including over $22 billion of co-financing. Established in 1966, ADB is owned by 67 member countries – 48 from the Asia Pacific region.

www.adb.org

About Robeco

Robeco, a Netherlands-based global asset manager with more than $290 billion in assets under management, offers a mix of investment solutions and strategies to institutional and private investors worldwide and is the center of asset management expertise within ORIX Corporation, Robeco’s majority shareholder.

www.robeco.com

About ORIX

ORIX Corporation is a leading Japanese financial services group, listed on the Tokyo and New York stock exchanges, providing innovative products and services across its lending, investment, life insurance, banking, asset management, automobile related, real estate and environment and energy related businesses in 35 countries worldwide.

www.orix.co.jp/grp/en/