Climate Investor One
Climate Investor One
Project Overall Goal
Climate Investor One is a blended finance vehicle designed to accelerate the development, construction, and implementation of renewable energy infrastructure projects in emerging markets. Comprised of three inter-linked investment funds, the Development Fund, the Construction Equity Fund, and the Refinancing Facility, CIO provides fit-for-purpose financing across the project finance lifecycle. Mobilizes both equity and debt capital.
Climate Investor One was established with funding from Institutional Investor, SanLam, the largest insurance company in Africa, and listed on the Johannesburg Stock Exchange. Sanlam Investment Holding partnered in 2017 with several European institutional investors and African infrastructure fund specialists to establish a financing facility (Climate Investor One) for investment in green projects and infrastructure.
Climate Investor One is a blended finance vehicle designed to accelerate the development, construction, and implementation of renewable energy infrastructure projects in emerging markets. Comprised of three inter-linked investment funds, the Development Fund, the Construction Equity Fund, and the Refinancing Facility, CIO provides fit-for-purpose financing across the project finance lifecycle. The Fund aims to support ~30 projects over its 15-year investment term in 10+ countries.
The Fund targets wind, solar, hydropower, and other forms of renewable energy projects owned and operated by independent power producers (IPPs). CIO employs a “whole-of-life” financing approach via three separate sub-funds to finance a project in three phases of project maturity:
1) a Development Fund (DF): funded by donor equity to progress the project through the development phase to the construction phase;
2) a Construction Equity Fund (CEF): funded by three tiers (senior equity, subordinated equity and first-loss equity) to progress the project through construction phase to project completion;
3) a Refinancing Fund (RF) (currently fundraising): to finance the project during the operation phase when the asset is earning revenues
CIO provides IPPs the ability to tap into a singular project financing entity, accelerating both fundraising and project activities. The whole-of-life financing method also allows CIO to recycle invested capital. As a project progresses through its development lifecycle and receives refinancing, capital is replenished to each sub-fund, whether in the form of development loan repayment, or equity exits once working loans are secured. This self-contained and end-to-end project finance structure allows CIO to maximize the number of projects it supports. CIO was also able to overcome the lack of deal flow caused by limited private capital availability by creating an investment asset that met institutional investor requirements: (i) the fund employed a portfolio approach to renewable energy asset creation, enabling CIO to deliver financial instruments of sufficient ticket size; (ii) it integrated credit enhancement mechanisms (repayment waterfall, credit guarantee) for market equivalent risk adjusted returns; and (iii) ensured a steady pipeline of bankable investments through the wholly concessional development fund.