Swedfund invests USD 35 million in the climate fund Climate Investor Two
Introduction
On November 25th, Swedfund invested USD 35 million in the Climate Investor Two fund. The main purpose of the investment is to finance projects and activities in developing countries for climate adaptation, i.e. adaptations of societies to the effects of climate change. The fund will also contribute to climate change mitigation.
The investments are expected to contribute to improved water, sanitation, and oceans infrastructure. An example could be in water treatment plants, which increase access to clean water. Such investments are important as increased risk of water scarcity is one of the consequences of climate change.
- We believe that it is very important to have more sustainable climate investments in developing countries. The fund consists of different parts with different risk and return profiles which makes it attractive for a broad spectrum of investors, including from the private sector. In this way, the fund contributes to the mobilization of private capital into climate investments which is an important objective for Swedfund, says Swedfund's CEO Maria Håkansson.
The UN Environment Agency UNEP demonstrated in its Adaptation Gap Report that there is a huge gap between required and actual investments in climate adaptation in developing countries. Today's funding needs to increase by 5-10 times to meet the needs, the report signals. This was also a major issue at the COP27 meeting, earlier this year.
From a Swedish perspective, Swedfund’s investments are an important way for such goals to be met. Since 2014, Swedfund’s energy investments have only been made in renewable energy and 90% of the portfolio is considered to be in line with the Paris Agreement. Since 2016, we calculate greenhouse gas emissions in our portfolio, and we work as shareholders, lenders or fund investors to support emission reductions in our portfolio companies. This is another investment aimed at combatting climate change.
Almost 40% of Swedfund's portfolio is focused on Energy & Climate and contributed to 10.7 TWh of renewable energy production and to the electrification of 217,000 households.