On June 3, 2025, the International Finance Corporation (IFC), a World Bank Group member, announced a $100 million equity investment in TPG’s Global South Initiative (GSI), a climate-focused fund targeting $2.5 billion to drive scalable solutions in emerging markets. Launched at COP28 in December 2023, GSI has raised $1.25 billion, including $500 million from UAE’s ALTÉRRA and commitments from TPG’s Rise Climate II and Asian/North American investors. Its first deal, acquiring Siemens Gamesa’s wind turbine business in India and Sri Lanka in March 2025, underscores its focus on clean energy. With emerging markets needing $3 trillion annually by 2030 for climate goals, can GSI catalyze transformative investments, or will high risks and policy shifts limit impact?

GSI Strategy and Investments

• Fund Objectives: Targets private equity investments in clean energy, sustainable materials, and adaptation tech, offering 10-15% returns via de-risking.

• Capital Raised: $1.25 billion by September 2024, with $100M from IFC and $500M from ALTÉRRA, aiming for $2.5B by 2026.

• Key Deal: Acquisition of Siemens Gamesa’s onshore wind business, adding 1 GW capacity annually in South Asia, cutting 2 Mt CO2e/year.

• Portfolio Focus: Prioritizes high-growth sectors like solar, green hydrogen, and climate-smart agriculture in India, Indonesia, and Sub-Saharan Africa.

“IFC’s expertise and ALTÉRRA’s capital will scale climate solutions,” said TPG.

ALTÉRRA’s Majid Al Suwaidi added, “GSI channels capital to underserved markets.”

Read more: Africa Carbon Support Facility Launched to Boost Climate Finance

Strategic Context

Aligns with global climate finance trends:

• Swiss Glacier Collapse: 1.5°C warming highlights adaptation needs in vulnerable regions.

• Africa’s ACSF: Carbon markets complement GSI’s clean energy focus.

• Energize Capital’s $430M Fund: Software-driven climate solutions parallel GSI’s tech investments.

• IFRS S2 Disclosures: GSI’s measurable impacts support emissions reporting.

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Challenges and Risks

• High Risks: Emerging markets face 20% higher project failure rates due to political instability, per IFC’s 2024 report.

• Capital Gap: $2.8T/year needed for clean energy in developing nations by 2030, vs. $100B current flows.

• Policy Uncertainty: U.S. deregulation, like $1.5B Army Corps cuts, may weaken global climate incentives, impacting 10% of GSI’s pipeline.

• Competition: Funds like Norfund’s $3.6B portfolio and ADB’s LEAP 2 ($1.5B) target similar markets.

What’s Next?

TPG expects $1.25B more in commitments by Q2 2026, targeting 10-15 investments, including 2 GW solar projects in Indonesia and green ammonia in India. IFC’s $10M advisory program will train 200 developers in 2026 to de-risk projects.

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