The Multilateral Investment Fund of the Inter-American Development Bank has signed papers to close establishment of the FondElec Latin American Clean Energy Services Fund, L.P., one of the key MIF projects for 2001 that is designed to promote clean, efficient, and renewable energy services in the private sector in Latin America and the Caribbean.
As the anchor investor, MIF has committed $10 million for the fund. In addition, the Tokyo Electric Power Company is investing $10 million and the Sumitomo Corporation is investing $5.5 million. The Fund expects to have subsequent closings in order to reach a total capitalization of approximately $50 million.
The Fund will make equity or quasi-equity investments in small innovative companies that offer energy services to other companies, providing access to financing and technical expertise to help them use energy-efficient measures or renewable energy for generating power.
The Fund will target potential investments in countries that have shown advances in energy efficiency and renewable energy technology projects, such as Brazil and Mexico. The manager of the Fund will be the Quito, Ecuador affiliate of the FondElec Group, Inc., headquartered in Stamford, Connecticut.
MIF has played a key role in structuring the fund in accordance with its environmental and sustainable development objectives. Initially, the fund will pursue direct investments in energy-service companies (ESCOs) that bundle together small- and medium-sized projects focused on improving the efficiency of production, distribution, and consumption of electricity or thermal energy. Subsequently, through performance contracts and other financial instruments, the ESCOs will help assist other businesses to reduce their energy consumption.
The Multilateral Investment Fund, an autonomous fund administered by the Inter-American Development Bank, provides grants and investments to accelerate private sector development and help improve the climate for investment in Latin America and the Caribbean.
This press release is for general informational purposes only. It does not constitute an offer for the sale of securities, or of participation in the fund referred to above.