SINGAPORE: Vietnam-focused private equity firm Mekong Capital is looking to build a climate fund worth up to US$200mil as early as next year, focusing on investments that will help with the regeneration of forests in the Mekong region.

The Ho Chi Minh City-based firm is setting up a team for the fund, which will look at businesses that will help restore forests including those involved in organic and seaweed farming in the Mekong region comprising Laos, Cambodia, Thailand and Vietnam, its founder and partner Chris Freund told Reuters.

“There are actually a lot of businesses like that that are doing those things in this region,” Freund said in an interview. “But there’s really no fund investing in those.”

The climate fund is set to be the first to focus specifically on South-East Asia with the launch coming at a time when investors globally are increasingly focusing on investments that can help in the fight against global warming.

Goldman Sachs Asset Management, the fund arm of Goldman Sachs, announced in January that it had raised US$1.6bil for its first private equity fund focused on investing in companies providing climate and environmental solutions.

Earlier this month, a US official announced that funding for Agriculture Innovation Mission for Climate, a US and United Arab Emirates-led initiative to make the world’s farming more environmentally friendly and resilient to climate change, has grown to more than US$13bil , from US$8bil in November.

Mekong Capital was founded in 2001 as the first fund in Vietnam to focus only on investing in private local companies instead of state-owned firms or joint ventures.

Its current investments include Vietnamese biotech firm Gene Solutions and retail chain HSV Group, according to its website.

In 2019 it launched Mekong Enterprise Fund IV with US$246mil in committed capital, more than double that of its predecessor, Mekong Enterprise Fund III, launched in 2015, its website showed.

The fund focuses mainly on sectors such as education, retail, education and consumer services.

 -Reuters