ICD launches Central Asia Renewable Energy Fund

The launch of a $ 50 million Central Asia Renewable Energy Fund was announced in Astana, Kazakhstan on Tuesday by Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD). The fund reaffirms the commitment of ICD to Caucasus and Central Asia Regions in key countries like Kazakhstan, Azerbaijan and Turkey. Target countries encompass Kazakhstan, Turkey, Azerbaijan, Kyrgyzstan, Turkmenistan, Tajikistan, Uzbekistan, Bosnia, Albania and Kosovo.
Interest in renewable energy has transpired in those countries because of diverse reasons that include greater environmental awareness, growing evidence of climate change, the scarcity of fossil fuels, and an increasing commitment by governments to support new sources of energy. With the objective to promote strategic investment flows and expertise into the renewable energy sector in those countries, the fund will capitalize on the region's still under-exploited potential. The heterogeneity of the target regions from macro economic, geographic and natural resource perspectives will provide the fund with the opportunity to build a naturally diversified portfolio.
Under ICD 's management and sponsorship, the fund is set to raise up to $ 50 million from governmental and institutional investors. The fund has received strong interest from several target investors and already firm commitment of $ 25 million, corresponding the minimum initial close target.
The fund will invest in a portfolio of private equity transactions in projects that use tried and tested technology such as wind, solar, biomass, and small hydro projects. The investment horizon of the fund is 8 years and exit possibilities will be provided over time. ICD Asset Management division aims through this initiative at creating a momentum in the whole value chain of the renewable energy sector in the target region with at the same time offering the opportunity to investors to receive stable long-term cash flows and allowing generation of carbon credits.
Farid Masood, director of advisory and asset management at ICD said: "This regional fund will not only create a momentum in foreign investments into renewable energy in the region but will also provide diversification to the energy mix of those countries, contribute to regional cooperation and foster transfer of technology with a multiplier impact on sustainable development."