Brookfield Asset Management (Brookfield) and ALTERRA Management on Thursday announced the setting up of a fund to support companies’ transition to a net-zero entity in emerging markets including India.

Brookfield has opened the fundraising for the Catalytic Transition Fund (CTF) with anchor commitment from ALTERRA, a joint statement said.

“With the urgent need to cut emissions and accelerate the climate transition, the Brookfield-managed CTF will harness a USD 1 billion commitment by ALTÉRRA funds (ALTÉRRA) to catalyze up to USD 5 billion in total capital for deployment into emerging markets,” the statement said.

South and Southeast Asia represent a key focus for CTF. The fund will target large and emerging markets like India, which have clear targets and policy directives supporting the transition to a net-zero economy, strong corporate demand for decarbonization, and areas where Brookfield can leverage its platform capabilities to source and execute opportunities.

The investments will also be made in the Middle East and Eastern Europe. At least 10 per cent of the Fund’s total capital will be contributed by Brookfield ensuring that its interests align with investment partners. A first close for CTF is expected by the end of 2024. It said the developing economies outside China receive less than 15 per cent of global clean energy investment, despite representing nearly one-third of global emissions and often yielding greater emissions reductions per dollar invested than in developed countries.

“The first fund in the Brookfield Global Transition Fund series (BGTF I) raised a record USD 15 billion in 2022. In February 2024, the second fund in the series (BGTF II) announced a first close of USD 10 billion and is on track to be larger than its predecessor. CTF’s first close is expected by the end of 2024,” the statement said.

Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management, said, “CTF is a private market solution to the global challenge of delivering transition investment to emerging markets. Brookfield is already a leading transition investor in these regions and has first-hand knowledge of the incredible opportunity and impact that is available in these chronically underfunded markets.”

Nawal Saini, Managing Director, Renewable Power & Transition, Brookfield Asset Management, said, “Emerging markets will require USD 1.6 trillion per annum to help achieve their Paris-aligned decarbonisation targets.