Dutch climate-focused investment manager Climate Fund Managers (CFM) has closed its second blended finance facility, Climate Investor Two, at more than $1 billion, claiming it is the world’s largest emerging market climate adaptation infrastructure fund.
CFM said it attracted asset managers, pension funds, insurers, development finance institutions, multilateral finance institutions, public sector banks and institutional investors as limited partners in the fund.
The vehicle blends public and private capital to invest in and co-develop water, waste and ocean infrastructure in emerging markets, including low-income countries, across Africa, Asia and Latin America.
It was formed in 2019 in partnership with the European Commission and the Dutch Fund for Climate and Development (DFCD), with the aim of closing the adaptation finance gap in developing countries, which was estimated to be $194-366 billion per year.
Since its first close in 2021, Climate Investors Two has committed $339 million to 25 climate adaptation and mitigation projects, including water supply and distribution projects in Vietnam and the Philippines, water desalination projects in Thailand and Kenya, and waste-to-energy platforms in Sierra Leone, South Africa and Thailand.
The Dutch investment manager claims Climate Investor Two is the world’s largest emerging market climate adaptation infra fund
Earlier this year, CFM already launched its next blended finance fund, targeting to raised $750 million to $1 billon to focus on the energy transition and green hydrogen sectors.
For the second fund, by the end of its life, the final goal is to provide safe drinking water and improved sanitation to 16.5 million beneficiaries, and to protect or restore 2.2 million hectares of ecosystems.
“While climate mitigation remains critical in the race to end the climate crisis, adaptation must be an equal priority. With the support of Sanlam Investments and the European Union, we have been able to pioneer the new Bridge-to-Bond mechanism, opening access to climate finance for a much broader group of investors,” Andrew Johnstone, CEO of CFM, said in a statement.
The facility’s structure includes a bridge loan, which is envisaged to be taken out by a climate bond within a few years. This mechanism creates a pathway for fixed income markets to access Climate Investors Two’s underlying asset base.
Within Asia, CFM is seen accelerating its presence in Malaysia, where its exposure has been through pan-Asia platforms. In July, CFM and Argos Partners were appointed as managers for Malaysian pension fund KWAP’s new shariah-compliant infrastructure fund.
The Malaysia Climate Infrastructure Fund (MCIF), under KWAP’s co-GP Dana Pemacu initiative, will receive an initial commitment of 500 million ringgit ($118 million) from the pension fund.
MCIF will focus on sectors such as renewable energy, transportation, digital infrastructure, water and wastewater.
“The mandate from KWAP to establish the Malaysia Climate Infrastructure Fund allows us to combine our international network and experience with Argos Partners’ deep local knowledge, to channel foreign direct investment into Malaysia and other emerging markets, driving the development of infrastructure that delivers tangible climate and community benefits,” Johnstone said in a separate statement.
Separately, KWAP is set to launch a 2-billion-ringgit ($473-million) Dana Iklim+ climate-focused initiative on October 16.
Malaysia will need around $570 billion over the next two decades to achieve its climate and sustainability goals, its Minister of Plantation and Commodities, Johari Abdul Ghani, reportedly said at the Kuala Lumpur Sustainability Summit 2025 ASEAN on October 14. The country is committed to reducing its carbon intensity by 45% by 2030.
