Government has joined international efforts to combat global warming by adding up to US$25 million in seed funding to a new investment fund that will invest in climate change mitigation technologies and businesses.
The seed capital is a catalyst for the establishment of the Commonwealth Climate Growth Fund (Cayman) LP, based in the Cayman Islands, and sponsored by the Commonwealth Enterprise and Investment Council (CWEIC).
Minister for Investment, Innovation and Social Development André Ebanks said government aims to mitigate the adverse impacts of global warming for the Cayman Islands, and is committed to promoting sustainability and innovation locally and globally.
To that end, government will fund “a new investment fund that will be focused on businesses and technologies that deliver climate mitigation and adaptation throughout the 54 member countries of the Commonwealth,” Minister Ebanks said.
Government has committed US$25 million in seed funding for a 10 year period. The money will be drawn down in proportion to total capital as investments are made in the first four to six years of the fund’s operation.
Local investors will be offered the opportunity to commit capital.
After raising initial capital locally, the fund will be placed with a bank to raise additional targeted capital. The target size of the fund is US$1 billion, and the government has made its investment contingent on the fund reaching a size of at least US$750 million.
The fund will invest up to US$50 million within the Cayman Islands in private sector “blue/green enterprises and projects”, that will be distributed within the first three years of the fund’s operation, if possible.
The fund will facilitate private sector investment across the Commonwealth to support green technology, help reduce greenhouse gas emissions, support adaptation, and build resilience to the adverse impacts of climate change.
Key investment themes are technologies underpinning renewable energy, natural resources, water and sanitation, food and agriculture, infrastructure, education, social development and healthcare.
With the establishment of the fund in partnership with the CWEIC, Minister Ebanks said, “The Cayman Islands can make a truly global contribution to sustainable development and capitalise on global opportunities within this space and, at the same time, enable financial support for green private sector enterprises and initiatives within the Cayman Islands, contributing to our cleaner, greener future and facilitating further protection of our pristine natural assets.”
He said choosing Cayman as the jurisdiction for the creation and management of the Commonwealth Climate Growth Fund made synergistic sense, given Cayman’s globally respected investment funds regime and financial services expertise.
“I fully anticipate that similar green financing funds will be established alongside this one,” Minister Ebanks said.
Lord Marland, CEO of the Commonwealth Enterprise and Investment Council, said the Cayman Islands was an ideal partner for launching and supporting the fund.
“The fund will yield benefits in investment that is focused on technologies and infrastructure which aid in production of renewable energy, create sustainable agriculture and use of natural resources, support more efficient use of water and widespread sanitation, and a host of other sustainable initiatives,” he said.
Governor Martyn Roper commended and endorsed the initiative, for its local and global impacts.
“It has enormous potential to assist the Cayman Islands in protecting its environment and its evolution towards a more sustainable society, while also yielding similar benefits across the 54 Commonwealth nations and other British Overseas Territories,” he said.
He noted that, like the Cayman Islands, many of these nations are extremely vulnerable to the negative impacts of global warming, and will reap significant and lasting benefit from investment in green technologies.