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Learn moreClean energy investment has long had a complicated reputation, but Brookfield believes the sector is showing seeds of promise in India and Southeast Asia. Its Catalytic Transition Fund (CTF) is a departure from its flagship energy strategy in many ways.
For one, the fund focuses exclusively on emerging markets, with 40-45% allocated to South and Southeast Asia alone.
The US-Iran War has fueled demand for diverse and reliable energy sources in these consumption-led economies. At the same time, the rise of AI is bringing in a new set of investors like Foxconn, Google, Amazon and Microsoft keen to co-develop renewable energy projects with infrastructure players like Brookfield.
Stefano Ghezzi, managing director of energy, Brookfield
"If you look at emerging Asia today, the fundamentals of renewable power are extremely strong. The demand for power is increasing very rapidly by 4-6% every year, and this is before AI. These countries are heavily reliant on fossil fuels and will need to decarbonize," said Stefano Ghezzi, Brookfield's managing director of energy, in an interview with PitchBook.
"Renewable power is also among the cheapest sources of energy in Southeast Asia, and one of the quickest to bring online today. Bringing a new gas plant online can take 5 to 7 years. But building a solar park can take 2 to 3 years," he added.
But capturing this market requires Brookfield to take a careful, curated position.
The CTF is on track to reach its full close of $5 billion at the end of 2026 and is the smallest in its family of energy funds. (The latest vintage of Brookfield's Global Energy Transition Fund II was $20 billion, and its Infrastructure Fund V will be even larger, Ghezzi shared.)
One reason is the fund's focus on emerging markets, which has a much smaller pool of investable deals. The CTF also invests in Latin America, Eastern Europe and the Middle East.
"It's quite hard to find $1 billion-plus investment opportunities in emerging markets. ... While the CTF is smaller in size, it will probably be the largest dedicated energy transition fund to invest in emerging markets. This gives us the ability to do smaller equity investments of between $200-300 million compared to our typical checks of $500 million and above," said Ghezzi, who is based in Singapore.
The fund has made six deployments so far, including the acquisition of Alba Renewables, which oversees 1.8 gigawatts of solar, wind and battery storage assets in the Philippines and Thailand, as well as a recently announced partnership with Foxconn to co-develop 1GW of renewable energy capacity in Vietnam.
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