British International Investment (BII), the UK’s development finance institution and impact investor, announced a $15 million commitment to the SUSI Asia Energy
Transition Fund (SAETF), a Southeast Asia-focused energy transition infrastructure fund managed by Swiss-based firm SUSI Partners. This is BII’s first commitment in Southeast Asia following its plan to re-enter the region and provide the investment capital needed to boost clean and sustainable economic growth and support the region’s green energy transition.
With this commitment, BII joins other development finance institutions, including AIIB, FMO, Swedfund, Norfund, and OeEB, as well as private investors in backing SAETF. The investment marks the start of realising BII’s ambitions to invest up to £500 million of climate finance in the Indo-Pacific region and forms part of its overall goal to target 30 per cent of total new commitments to climate finance.
SAETF targets infrastructure investments across the energy transition spectrum, including renewable energy, energy efficiency, and energy storage projects, and focuses on emerging economies in Southeast Asia, including Vietnam. The Fund will contribute to global climate mitigation goals and the Paris Agreement by financing clean energy solutions, increasing the supply of reliable and affordable electricity for businesses and consumers, and enabling access to clean energy solutions in underserved areas.
Southeast Asia has been one of the fastest growing regions in the world. While the countries are in various stages of development, almost all their economies have more than doubled in size since 2000.
This means that energy demand in the region has increased on average by around three per cent a year over the past two decades. Vietnam in particular has seen a massive spike in electricity demand as it has become a manufacturing hub in recent years.
To address the growing energy demand and further reduce dependence on fossil fuel generation, Vietnam has committed to reaching net zero emissions by 2050. The region’s overall sustainability ambitions require at least $200 billion of energy sector investment by 2030, of which over three quarters needs to be channeled into clean energy
Consequently, BII’s investment is also aimed at attracting further commercial investors to unleash climate finance opportunities and support green, resilient economic growth in the region. This is a great step towards UK’s support on Vietnam’s Just Energy Transition Partnership which was launched in December 2022 and targets to mobilise finance to support Vietnam to achieve its sustainability ambition.
With SUSI Partners, SAETF enlists the expertise of a specialised investment manager with a proven track record of investing globally across the energy transition infrastructure spectrum. More recently, they announced an investment in Asia Clean Capital Vietnam, a solar developer for commercial and industrial customers in Vietnam. It reiterates the renewed approach to investing in climate finance in Vietnam as one of BII’s priority markets in the Indo-Pacific region.
Wymen Chan, Head of Asia at SUSI Partners, said: “Energy demand in Southeast Asia is growing fast in line with the region’s economic development. Our goal is to direct capital towards the buildout of infrastructure that allows this growth to occur in a sustainable manner while proving that Southeast Asia is not just an impactful but a highly attractive market for public and private investors alike.” British Ambassador to Vietnam, Iain Frew said: “I am delighted to see British International Investment taking concrete action in supporting the Indo-Pacific region with a focus on climate finance.
Investments such as this demonstrate the UK’s strong commitment to helping Vietnam exploit its great clean energy potential and lead transformative, sustainable economic growth.”
Srini Nagarajan, Managing Director and Head of Asia at BII added: “We have been investing across Asia for over 30 years. SAETF is an excellent re-entry point for BII into Southeast Asia and a clear statement of our ambition to provide climate finance and support innovation to meet the challenges from the climate crisis. We laud the region’s climate ambitions and look forward to collaborating with SUSI’s local teams to further develop scalable and bankable sustainable projects.”
The commitment from BII will contribute to the United Nations’ Sustainable Development Goals on Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8) and Climate Action (SDG 13).