Latin Renewables Infrastructure Fund
United States of America
Last updated 12 May 2020, by Impactyield.
Latin Renewables Infrastructure Fund (LRIF) is a private equity fund to invest in the growing renewable power and energy efficiency sectors of Latin America and the Caribbean(“LAC” or the “Target Region”). LRIF is managed by Real Infrastructure Capital Partners LLC, an independent fund management firm based in New York. REAL’s Latin Renewables Infrastructure Fund is one of the very few private equity renewable energy funds exclusively focused in the LAC.
REAL’s Latin Renewables Infrastructure Fund was able to achieve a strong first closing in July 2012 with active support from its anchor investors: DEG, FMO, IFC and SIFEM. The participation of these influential institutions as investors further enhances the fund’s stature within its target markets. In 2013, LRIF reached its final close with additional investments from other institutional investors, governments and DFIs, bringing the final fund's size to $120 million.
LRIF's investments will initially focus on Central America, Peru, Colombia, Caribbean, Mexico and Brazil. Target sectors are renewable power generation and energy efficiency for investments in operating, expansion, brownfield and construction stage projects and greenfield mid and late projects.
The investment size will be from US$5 million to US$ 25 million, to create a portfolio of 8-12 investments.
REAL seeks to provide investors with superior risk adjusted returns, while addressing important regional energy and economic development challenges, and global environmental sustainability initiatives. The Fund invests in control and non-control equity interests in high-growth, asset-based, capital-intensive segments of the renewable energy spectrum, including, but not limited to: hydro, geothermal, solar, wind, and biomass, as well as energy efficiency projects and companies. While targeting the LAC region, the Fund focuses on those countries that provide an optimal mix of supply and demand dynamic, policy support and investor protections, including Central America, select Caribbean countries ,Mexico, Brazil, Colombia and Peru.
Key performance indicators
Asset manager: REAL Infrastructure Capital Partners
Product track record: Fund has 11 years of track record
Target IRR: 15%
Committed Capital: 120,000,000 USD (US Dollar)
Target return category: Risk-adjusted market-rate of return
Fund domicile: United States of America
Product status: Closed - still investing
Inception year: 2011
Vintage year: 2012
Target close date: 01/08/2013
Product term: 10 years +2x 1-yr ext
Assets under management: 150,000,000 USD (US Dollar)
Investment size: Min: 5,000,000; Max: 25,000,000; Avg: 15,000,000
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 11
Fund investments to date exited or repaid: 0
Management fee: 2%
Carried interest: 20%
Hurdle rate: 8%%
GIIN Investors' Council Investment: Yes
Limited Partners / Investors: the German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG); the Netherlands Development Finance Company (FMO); the International Finance Corporation (IFC); and the Swiss Investment Fund for Emerging Markets (SIFEM), the Swiss development finance institution managed by Obviam, plus European Government, Multilateral Financial Institution, Fund of Funds, 3 Institutional Private investors.
Limited Partner / Investor Type: Development Finance Institution (DFI), Endowments/Foundations, Family Office, Other Institutional Investors
REAL is committed to financing renewable energy projects in emerging markets that are developed and managed in an environmentally and socially responsible manner and that meet international best practices. Through its environmentally and socially sustainable investment approach, REAL aims to improve and enhance the financial, reputational, and sustainability value of the companies in which it invests.
Renewable energy investments in Emerging Markets can contribute greatly to energy independence, climate change mitigation, rural development, improved health and lower health costs (linked to air pollution). Additionally, in many of LRIF's focus countries, investments in Renewable Energy can lower both the energy prices without need for subsidies that would otherwise be diverted from social programs, and the carbon footprint of these economies.
To ensure best practice in investing in clean and renewable energy in the Target Region, REAL has adopted the IFC's Policy on Environmental and Social Sustainability as well as the IFC's Performance Standards for Infrastructure Investments, a comprehensive set of guidelines that ensure that investments are made in a manner that is both socially responsible and reflect sound environmental management practices. These guidelines are reflected in the REAL Social and Environmental Management System (“SEMS”), a rigorous internal framework for social and environmental policy compliance throughout the Fund’s investment process.