Brookfield Asset Management (Brookfield) announced an initial closing of US$2.4 billion for the Catalytic Transition Fund (CTF), marking a significant milestone towards the target of raising up to US$5 billion for deployment towards clean energy and transition assets in emerging markets.
The CTF was previously launched at the 28th United Nations Climate Change Conference (COP28) with up to US$1 billion of catalytic capital provided by ALTÉRRA Funds (ALTÉRRA), the world’s largest private investment vehicle for climate finance based in the United Arab Emirates with the purpose of mobilizing investment at scale to finance a new climate economy. ALTÉRRA’s fund commitment has been designed to receive a capped return, thereby improving risk-adjusted returns for other investors in the CTF. Brookfield has committed to provide 10% of the CTF’s target to align itself with investment partners and investors.
Brookfield announced four additional investment partners for CTF: CDPQ, GIC, Prudential, and Temasek, among others. These institutional investors are important global players in transition investing and should be valued partners to Brookfield as CTF gets deployed in its target markets. CTF has now raised approximately half of the $5 billion total capital 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. This strategic partnership will help drive clean energy investment into emerging markets, where Brookfield said investment needs to increase sixfold over current levels to reach the US$1.6 trillion required annually by the early 2030s in line with global net zero targets. The 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 2025.
“CTF demonstrates ALTÉRRA’s catalytic capital as a powerful multiplier of climate finance to the Global South,” said H.E. Majid Al-Suwaidi, chief executive officer (CEO) of ALTÉRRA. “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.”
“These anchor commitments from CDPQ, GIC, Prudential, and Temasek demonstrate significant momentum for the Catalytic Transition Fund,” said Mark Carney, chair and head of transition investing at Brookfield Asset Management. “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.”
“Globally, around US$6.5 trillion will be needed yearly for the energy transition over the next 15 years,” said Marc-André Blanchard, executive vice-president and head of cdpq global and global head of sustainability, said. “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.”
“We believe there is an opportunity to drive scalable positive change in emerging markets through investing in the climate transition,” said Don Guo, chief investment officer, Prudential plc, said “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.”
