Triodos Groenfonds (Triodos Green Fund), the oldest and largest green fund in the Netherlands, has increased its allocation for investments in renewable energy in emerging markets to 20% of the fund volume. The fund invests in renewable energy projects in these countries since 2014, until recently up to a maximum of 10%.
As per the end of September 2017, the fund volume of Triodos Groenfonds amounted to EUR 808 million. As a result, following the increased allocation, the fund currently has EUR 160 million available for investments in these emerging markets.
The management of Triodos Groenfonds believes that especially for economies in emerging markets, a sustainable and clean energy supply is crucial. Itske Lulof, Director Energy and Climate at Triodos Investment Management: “Many emerging markets are faced with a shortage in energy supplies, which means that basic needs of local companies and citizens often cannot be met. In addition, in many cases fossil fuels are used as the main source of energy. Although in many emerging markets natural sources such as wind, sun and water are abundantly available, the share of wind and solar energy is currently still very limited. Given our extensive track record in both renewable energy and emerging markets, we see ample opportunities to play a role in increasing the share of affordable and renewable energy in these regions specifically.”
In the past three years, the fund has built a diversified portfolio in emerging markets with a solid spread across sectors, technologies and regions. In cooperation with other impact investors, development banks and multilateral organisations, Triodos Green fund contributes to increasing the share of renewable energy in these countries by financing solar, wind and (run of river) hydro projects. These investments have a substantial positive impact on the sustainability, CO2 reduction and livability of these countries.
Increasing the allocation for investments in emerging markets enables the fund to further increase its positive impact and to continue being a front runner in the sector. Triodos Groenfonds shows that private sector investments in renewable energy, also in emerging markets, are both impactful and increasingly economically viable, and thus acceptable from a risk perspective.