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The fund is focused on investment in greenfield renewable energy infrastructure in high growth middle-income markets and is expected to enable more than 10 GW of clean energy
Copenhagen Infrastructure Partners (CIP) announced the launch of its Growth Markets Fund II (GMF II), during the 2023 United Nations Climate Change Conference (COP 28) in Dubai. With a focus on developing and building offshore and onshore wind, solar PV, energy storage and Power-to-X projects in selected high growth middle-income markets across Asia, Latin America and EMEA, the fund has a target size of USD 3 billion and is expected to deliver renewable energy infrastructure projects reflecting over USD 10 billion of capital investment. This will enable more than 10 GW of new renewable energy capacity. It is set to be the world’s largest fund focused on greenfield renewable energy investments in high growth, middle-income markets.
“To reach net-zero, we need to bring affordable, reliable, and clean energy to all parts of the world. With a continuous increase in carbon emissions, successful deployment of large-scale renewable energy is particularly important in high-growth, middle-income countries. This fund will be deploying significant private capital and therefore ensure renewable projects in countries, where it will contribute to growth and job creation and deliver substantial impact in terms of reducing carbon emissions,” said Christina Grumstrup Sørensen, Senior Partner and founder of CIP.
By all estimates, emissions from middle-income markets are expected to grow dramatically over the coming decades. Renewable energy power capacity will need to at least triple by 2030 for the global community to stay on the path to net-zero. To achieve these capacity goals, investments into clean energy must more than quadruple, and middle-income and emerging markets alone will need investments of more than USD 1.9 trillion by 2030. The GMF II fund will play an important part in reaching and realizing these goals.
“These middle-income and emerging markets represent not only a mandatory task for the industry – and we believe that they are also very attractive markets for investors seeking exposure to the some of the highest expected growth rates for renewables. They are estimated to account for 25% of global renewable energy capacity by 2050, as economic and demographic growth drives rapidly increasing electricity demand,” said Niels Holst, partner at CIP and co-head of GMF.
“With GMF II we are applying our proven greenfield and industrial investment approach from our predecessor funds to create excess returns while significantly mitigating risks. The fund is off to a good start with a large and diversified portfolio of projects reflecting potential equity commitments of more than USD 5 billion – far exceeding the target fund size. We expect the fund to be a global driver in the green and just transition,” said Ole Kjems Sørensen, Partner at CIP and co-head of GMF.
Based on GMF II’s already existing portfolio of renewable energy development projects, the fund has the potential to reduce greenhouse gas emissions by more than 10 millon tonnes annually, while powering more than 10 million homes with clean energy and creating more than 100,000 full-time equivalent (FTE) years globally.
Related Article: Copenhagen Infrastructure Partners Raises €2 Billion for Renewable Energy Funds
The launch of GMF II adds to what has already been a record year at CIP in 2023, with first close of the fifth flagship fund, Copenhagen Infrastructure V (CI V), at nearly EUR 6 billion as well as final close of both the Advanced Bioenergy Fund I and Green Credit Fund I at a combined EUR ~2 billion. GMF II is CIP’s 12th fund.