Asia-Pacific private credit specialist ADM Capital has launched its Asia Climate-Smart Landscape Fund (ACLF) for Indonesia, with seed commitments from Ceniarth, the David and Lucile Packard Foundation, the John D. and Catherine T. MacArthur Foundation, Margaret A Cargill Philanthropies and RS Group, and a target of total commitments of up to US$200 million in further closes.
ACLF, which is ADM Capital’s first Indonesia-focused impact fund, aims to address the significant funding gap for small and medium-sized enterprises [SMEs] engaged in sustainable agriculture, agroforestry and aquaculture by providing medium-term senior secured lending. The fund also links 50% of carry to achieving impact, which will be verified annually.
The US International Development Finance Corporation is providing a 50% guarantee across the fund at the asset level. Also participating in the guarantee are the United States Agency for International Development, Rabo Foundation and the Australian Government’s Department of Foreign Affairs and Trade.
The blended finance fund will set both financial and impact targets for projects. Impact targets include enhancing livelihoods and increasing employment, achieving fairer gender ratios, improving land use management and reducing greenhouse gas emissions.
“The launch of ACLF builds on ADM Capital’s longstanding leadership in integrating ESG [environmental, social and governance] factors into the underwriting process to manage risk and enhance value,” says Chris Botsford, co-founding partner and chief investment officer. “Indonesia is home to the third-largest rainforests globally and faces constant challenges from rapid development.”