By Lynda Kiernan-Stone
Deutsche Bank is playing a foundational role in a new private equity fund being launched in Southeast Asia by the Green Climate Fund (GCF).
The bank is investing $50 million into the Mekong Earth Regeneration Fund (MERF), an affiliate fund to the GCF that aims to reduce emission by approximately 8 million tons and advance the transition to sustainable and resilient agriculture and food systems across the Lower Mekong region.
MERF is the dedicated impact initiative of Mekong Capital, a Vietnam-focused private equity firm specializing in growth capital investments and known for its “vision-driven” investment approach through which it partners with management teams to achieve breakthrough performance.
Deutsche Bank has agreed to provide oversight for the new platform, ensuring that capital is being deployed in line with GCF policies, including international environmental and social standards, while Mekong Capital will provide fund manager services by investing capital.
GCF explains that it is the world’s climate fund for developing nations, mobilizing capital at scale, strengthening institutions, and driving transformative change through global partnerships.
As an Accredited Entity of CGF, Deutsche Bank has facilitated this investment by GCF in the new fund, which is expected to attract capital at a 3:1 ratio, highlighting how blended finance can accelerate climate investment in emerging markets.
“Blended finance structures like MERF are critical to unlocking private capital at scale,” said Kamran Khan, Deutsche Bank’s Head of Sustainable Finance for APAC & MEA.
“By combining concessional funding with institutional investment, we can accelerate innovative climate solutions to reduce emissions in markets which can be perceived as higher risk.”
MERF will invest in agribusinesses and value-chain participants that work directly with smallholder farmers, supporting the transition to lower-emission and climate resilient production models including regenerative farming, agroforestry, and sustainable aquaculture with a focus on improving soil health, reducing chemical inputs, and strengthening ecosystem resilience.
This fund structure and mission are designed to address a critical gap in climate finance in emerging markets such as Vietnam and Laos, where there is a lack of private equity resources for investments in regenerative agriculture and other priority verticals.
By providing equity capital, MERF ensures long-term funding for investee companies looking to invest in regenerative ag and sustainable land use without immediate repayment pressures.
“This investment demonstrates the strategic power of GCF’s catalytic climate finance to crowd in much larger investment flows from the public and private sectors,” said Hemant Mandal, GCF Regional Director for Asia and the Pacific.
“With an ambitious target size, the project aims to support several companies in the agro-forestry sector, promoting sustainable land-use practices and low-emission development pathways in Lao People’s Democratic Republic and Viet Nam.”
“The project reflects GCF’s commitment to adopting innovative finance solutions to deliver capital at scale for climate action.”
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