Vietnam's Mekong Capital Plans to Launch S-E Asia Climate Fund by 2024

Mekong Capital, a private equity firm based in Ho Chi Minh City, Vietnam, has announced its plans to establish a climate fund with a potential value of USD 200 million. The firm aims to launch the fund as early as next year, with a specific focus on investing in initiatives that contribute to the regeneration of forests in the Mekong region.

Chris Freund, the founder and partner of Mekong Capital, stated in an interview with Reuters that the climate fund will identify businesses involved in activities such as organic and seaweed farming, which play a crucial role in forest restoration in the Mekong region. While there are existing companies engaged in such endeavors, there is currently no dedicated fund supporting these types of investments.

The Mekong region, encompassing Laos, Cambodia, Thailand, and Vietnam, has witnessed substantial deforestation in recent years. Mekong Capital recognizes the urgency of addressing this issue and aims to support sustainable business ventures that contribute to the reforestation efforts in the region.

This climate fund will be the first of its kind to concentrate specifically on Southeast Asia. Its launch coincides with a global trend of increased investor focus on climate-related investments aimed at combatting the effects of global warming. In January, Goldman Sachs Asset Management raised USD 1.6 billion for its inaugural private equity fund, dedicated to investing in companies that provide climate and environmental solutions.

Furthermore, significant investments have been made to promote environmentally friendly farming practices and enhance agricultural resilience to climate change. The Agriculture Innovation Mission for Climate, a joint initiative led by the United States and the United Arab Emirates, recently received additional funding, bringing the total amount to over USD 13 billion.

Mekong Capital was established in 2001 as Vietnam's first fund exclusively dedicated to investing in local private companies, rather than state-owned enterprises or joint ventures. The firm's current investment portfolio includes companies such as Gene Solutions, a biotech firm, and HSV Group, a retail chain, according to its website.

In 2019, Mekong Capital launched Mekong Enterprise Fund IV, which raised USD 246 million in committed capital, more than doubling the amount raised by its predecessor, Mekong Enterprise Fund III, launched in 2015. The fund primarily focuses on sectors such as education, retail, and consumer services.

With the upcoming climate fund, Mekong Capital aims to contribute to the restoration and preservation of the Mekong region's forests, addressing the pressing environmental concerns of the area. By investing in sustainable businesses, the firm seeks to promote positive change and foster environmental stewardship in Southeast Asia.