Project detail - South Asia Growth Fund IV, L.P.

Who is our prospective customer?

South Asia Growth Fund IV LP (“SAGF IV” or “the Fund”) is the successor fund of FMO investees South Asia Growth Fund II LP and South Asia Growth Fund III LP.

What is our funding objective?

SAGF IV is a private equity fund that seeks to continue the strategy as pursued by its predecessor funds, focusing on growth equity and quasi-equity to mid-market companies in India operating across climate adaptation and mitigation themes. These include businesses across the climate solutions value chain, in sectors such as circular economy, renewable energy supply chain, energy transition enablers, industrial decarbonization, food and agriculture, water and wastewater management, clean transportation, and green building solutions. FMO intends to commit USD 20 mln at first close.

Why do we want to fund this investment?

FMO’s investment aims to support activities that contribute to climate mitigation and adaptation in India, contributing to SDG 13, in line with FMO’s methodology to determine the green finance attribution.

What is the Environmental and Social categorization rationale?

SAGF IV is categorized as E&S Category B+ in accordance with FMO’s Sustainability Policy. The Fund strategy focuses on climate adaptation & mitigation in India and target sectors include: (i) circular economy; (ii) renewable energy transition enablers; (iii) industrial decarbonization; (iv) agri-tech; (v) water and wastewater; (vi) clean transportation & smart cities; and (vii) green building solutions. These target segments and subsectors will potentially have limited environmental and social (E&S) risks or impacts which will be few in number, generally site-specific, and readily addressable through mitigation measures and good industry practices. The Fund will not invest in any higher risk activities or E&S Category-A projects. Risk exposure is thus expected to range across IFC Performance Standards (PS) 1-4, PS-5 (limited) and to contextual risks. The Fund Manager (FM) has consistently demonstrated strong and proactive E&S performance across its predecessor funds - SAGF II and III. The FM’s Environmental, Social and Governance (ESG) impact and climate risk management systems are fully integrated into the investment process, which align with the IFC PS and other global frameworks. FMO will further support the Fund in enhancing existing systems and capabilities to maintain best practices, manage contextual risks and identify opportunities for value creation.