Latin American Energy Services Fund

($25,000 advisory support for $50 million total investment)

Purpose: Advise Multilateral Investment Fund (MIF) on: the current political state of the energy efficiency, renewable energy and IPP markets in the region; existing Energy Service Companies (ESCOs) that have been established in the region; the availability of debt financing for small to medium sized energy efficiency projects in the countries in the region; the potential rate of return on energy efficiency projects in the Latin American energy efficiency market.

Status: IAF support approved early 2001. The intervention was completed in March 2001. Based on the results of this consultancy and other inputs, MIF decided to move forward with seeking support for the proposed Latin American Clean Energy Services Fund. To this end, they proposed to their Donors Committee that the MIF provide US$10 million in capital for this equity investment fund. The Fund Manager will be the FondElec Group, an investment management company with extensive experience in the Latin American region. The request was approved by the Donors and the additional $15 million required for first closing was achieved in 4th quarter. The Fund was formally launched December 4th, 2001, and made its first investment in 2nd quarter 2002.

Summary: Supporting the Multilateral Investment Fund (MIF) in moving forward with a new equity fund for the Latin American and Caribbean region, dedicated to investments in energy services companies. The purpose of the fund is to provide funding for innovative companies that employ energy efficiency measures or utilize renewable energy for generating power. More specifically, this Fund will invest in companies that operate as energy services companies (ESCOs) and that then, through performance contracts and other financial instruments, assist other enterprises in either reducing their energy consumption or in seeking alternative methods for power generation.