Dolma – an impact investor focused on Nepal – plans to raise its first fund focused on climate change.
Dolma Climate Fund plans to invest primarily in solar and run-of-river hydropower plants in the country, and hopes to raise $200 million, with a hard cap of $300 million.
CEO Tim Gocher told Environmental Finance it hopes to reach a first close of about $100 million next year.
Dolma has already launched two private equity funds, which invest in a range of themes including renewables, healthcare and technology, but this will be its first to invest solely in renewables and clean energy assets.
It would also be its biggest fund – the previous two raised $36 million and $72 million, respectively.
When asked what returns the fund will generate, Gocher said renewables assets developed by the previous two funds have generated internal rates of return (IRRs) between 17% and 20%.
“We have a pipeline of projects ready to go at first close,” he said, pointing to an initial priority list of eight hydro and solar projects with an aggregate capacity of 350MW.
He pointed out that Nepal needs for some $46.5 billion of investment to finance planned renewables capacity for domestic consumption and to export to countries including India, which it has agreed to provide with 10GW of energy a year.
The projects would have power purchase agreements in place with the national electricity authority, which he pointed out “pays its bills on time and has never defaulted in its 30 years of existence”.
Previous renewables investments by the private equity fund have been listed on the country’s stock exchange, and this will be a potential exit for Dolma Climate Fund.
The fund will have a duration of 10 years, with the ability to extend by another two years at the discretion of shareholders.
Read a profile of Dolma here.