Robeco partners on Chinese cleantech

European asset manager Robeco has launched a China-focused cleantech private equity fund in conjunction with a newly formed company controlling the assets of the Tianjin government.

Details, such as the size and number of anticipated investments to be made by the Robeco TEDA Sustainable Private Equity Fund, were not available last week. The fund will be denominated in Renminbi and will focus on reducing waste, emissions and improving energy and water efficiency. It will invest in local cleantech companies and companies based outside of China.

Robeco’s fund launch comes as China, which derives 75% of its electricity from coal and is considered the world’s largest greenhouse-gas emitter, recently introduced a subsidy to promote the use of alternative energy. China is also closing older coal-fired power plants and resorting to cleaner energy to fuel economic growth.

The nation wants to boost the proportion of renewable electricity from 16% in 2006 to 23% by 2020, according to the Climate Group, a coalition of companies and governments that support solutions to global warming.

Tianjin is the sixth largest city in China, with more than 11.5 million residents. The Chinese government has supported the city’s efforts to build financial infrastructure and become an economic powerhouse. The Tianjin Binhai New Area, a Special Economic Zone similar to Shanghai’s Pudong New Area, already houses more than 100 private equity firms, according to Robeco.

The Robeco TEDA Sustainable Private Equity Fund will certainly have plenty to invest in. Venture capitalists put more than $230 million behind 16 cleantech companies in China during 2008, according to data from Thomson Reuters (publisher of PE Week). That number could grow if the government puts environmental concerns at the top of its priority list.

Robeco has been investing in renewable energy and sustainable businesses since 1995. It is a limited partner in cleantech funds managed by Nth Power, Chrysalix Energy Venture Capital, Braemar Energy Ventures, Sail Venture Partners, Israel Cleantech Ventures, NGEN Partners and others.

The firm also made a number of cleantech-related direct investments during 2008, according to Thomson Reuters. It backed fuel cell maker ReliOn, plastics recycler Alternative Waste Solutions, smart-grid company GridPoint, efficient spark-plug maker Enerpulse, and next-generation transmission company Fallbrook Technologies. —Alexander Haislip and Reuters