Brookfield Asset Management announced an initial closing of $2.4 billion for the Catalytic Transition Fund, marking a significant milestone towards raising to $5 billion for deployment towards clean energy and transition assets in emerging markets.
CTF was previously launched at COP28 with up to $1 billion of catalytic capital provided by ALTÉRRA funds, which is the world’s largest private investment vehicle for climate finance based in the United Arab Emirates to mobilize investment at scale to finance a new climate economy. And as it looks toward innovative approaches to catalyze capital for climate solutions in emerging markets, ALTÉRRA’s fund commitment has been designed to receive a capped return, thereby improving risk-adjusted returns for other investors in the Fund. Brookfield committed to providing 10% of the Fund’s target to align itself with investment partners and investors.
Brookfield is also announcing four additional investment partners for CTF: CDPQ, GIC, Prudential and Temasek, and others. And these leading institutional investors are important global players in transition investing and will be valued partners to Brookfield as CTF gets deployed in its target markets. CTF has raised about half of the total capital of $5 billion targeted for the Fund.
CTF is focused on deploying capital into clean energy and transition assets in emerging markets in South and Central America, South and Southeast Asia, the Middle East, and Eastern Europe. And this strategic partnership will help drive clean energy investment into emerging markets, where investment needs to increase sixfold over current levels to reach the $1.6 trillion required annually by the early 2030s in line with global net-zero targets.
This fund also benefits from ALTERRA’s push to significantly expand private finance and fuel ambitious new climate strategies and Brookfield’s global leadership in clean energy and transition investing, building on over three decades of operational experience in renewable energy technologies and its track record as the world’s largest transition investor among alternative asset managers.
This fund expects to announce its initial investments later in 2024, and a traditional first close – with additional capital from Brookfield’s ongoing fundraising efforts through its extensive network of institutional investors – is expected by early next year.
KEY QUOTES:
“CTF demonstrates ALTÉRRA’s catalytic capital as a powerful multiplier of climate finance to the Global South. This early momentum around CTF shows strong global demand not just for climate strategies, but for opportunities to invest in climate solutions in emerging markets. ALTÉRRA looks forward to working with CDPQ, GIC, Prudential and Temasekand other partners who share our ambitions to redefine how the world invests in climate solutions and go beyond business-as-usual to deliver positive impact for both people and planet.”
-H.E Majid Al-Suwaidi, CEO of ALTÉRRA
“These anchor commitments from CDPQ, GIC, Prudential and Temasek demonstrate significant momentum for the Catalytic Transition Fund. The support from the world’s most sophisticated investors for the CTF strategy underscores the unique combination of the major commercial opportunity and the climate imperative. We look forward to working with other like-minded investment partners to accelerate the transition in these critical and vastly underserved markets.”
-Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management
“Globally, around $6.5 trillion will be needed yearly for the energy transition over the next 15 years. It’s a staggering figure, and various partnerships and investments are necessary to accelerate the path forward. For CDPQ, the energy transition is key to creating lasting value. By investing in Brookfield’s Catalytic Transition Fund, we are supporting innovative approaches to mobilize capital for climate solutions in emerging markets, where investments are critical to tackle the global environmental challenge.”
-Marc-André Blanchard, Executive Vice-President and Head of CDPQ Global and Global Head of Sustainability
“We believe there is an opportunity to drive scalable positive change in emerging markets through investing in the climate transition. Prudential’s investment in Brookfield’s Catalytic Transition Fund underscores our belief that responsible investment is not only an environmental imperative but also a significant opportunity for growth in emerging markets. By supporting a just and inclusive transition, we enable the benefits of sustainable development to be shared widely, contributing to social equity and long-term prosperity.”
-Don Guo, Chief Investment Officer, Prudential
