Maybank today signed an agreement with Maybank MEACP Pte Ltd of Singapore to launch its US$500 million (RM1.568 billion) private equity fund, the first private equity fund backed by a South East Asian bank dedicated to clean and renewable energy in Asia.
The fund will prioritize power generation infrastructure projects using renewable sources and will have a first close of US$87.5million, of which Maybank will contribute US$50 million.
The agreement was signed by Tengku Dato’ Zafrul Tengku Aziz, CEO of Maybank Investment Bank (Maybank IB) on behalf of Maybank and Mr Mumtaz Khan, CEO of Maybank MEACP Pte Ltd of Singapore.
Speaking at the launch, Tengku Dato’ Zafrul said, “This fund is a ten-year private equity fund that will invest in a diversified portfolio of clean energy projects in the Asia-Pacific region with a focus on China, India, Indonesia, Malaysia, Thailand, the Philippines, Vietnam, Cambodia and Laos.
He added that the launch of the fund was in line with the growing awareness, and demand from clients for environmentally-friendly financial products. “The structure of the fund was designed to tap into the growing interest in clean and renewable energy opportunities in Asia amongst a diverse investor base,” he added. “It would be the first fund dedicated for clean and renewable energy by a South East Asian bank and will focus on clean energy projects in sectors such as wind, solar, geothermal, small hydro, biomass, bio fuels and energy efficiency in the region.”
“Through this fund, Maybank is able to tap into a sector with immense potential and attractive returns, whilst being a responsible corporate citizen in doing our part for the environment,” concluded Tengku Dato’ Zafrul.
Meanwhile, Mr. Mumtaz Khan, CEO of Maybank MEACP Pte Ltd said, “The clean and renewable energy sector is a high growth sector with multi-faceted opportunities for small and medium business groups. With its significant natural resources especially in palm oil, Malaysia offers a huge potential to develop biomass and biogas projects utilizing agriculture residue to be converted into energy and other products.”
Mr. Khan added that Malaysia is already well established as a competitive manufacturing base and with the continuing strong support of the Government, will be in a position to attract global players in this industry.
Malaysia has created some of the most successful companies in the region and globally such as AirAsia, YTL and Petronas. The Fund will be an active partner and we seek to create similar companies in Malaysia to provide the energy of the future for Malaysia and the region.
Clean energy is becoming even more popular as a source of power to meet Asia’s growing needs. The long-term fundamentals are compelling as rising fossil fuel prices, combined with high volatility in recent years, have sparked a greater worldwide interest in clean energy. The clean energy industry is growing exponentially and is expected to continue to grow over the next decade.
Asian governments are prioritizing policy guidelines and incentives for achieving clean energy targets. Broad ranges of clean energy sub sectors provide in-built diversification. Clean energy in Asia is a rapidly growing infrastructure asset class with multi-faceted opportunities. Carbon credits provide additional hard currency revenues and further enhance project returns.
The Fund will be co-managed by Mayban Ventures Sdn Bhd and its joint venture partner, Mr. Mumtaz Khan, CEO of Maybank MEACP Pte. Ltd. It immediately makes Mayban Ventures one of the leading players in the Clean Energy private equity space.
The Fund will comprise two parallel investment vehicles – US$350 million Master fund supported by Maybank, Asian Development Bank and International Finance Corporation and US$150 million Co-financing vehicle supported by the Washington D.C based Overseas Private Investment Corporation of the US.