Deutsche Bank Supports $50m Climate Fund for Southeast Asian Agriculture

Deutsche Bank has added its backing to a new climate-focused private equity fund aimed at accelerating investment in sustainable agriculture across Southeast Asia via a $50 million commitment from the Green Climate Fund (GCF).

The Mekong Earth Regeneration Fund (MERF) will invest in agribusinesses and value-chain companies working with smallholder farmers in Vietnam and Laos, with a focus on expanding climate-resilient farming practices and strengthening food systems across the Lower Mekong region.

As an accredited entity for GCF, Deutsche Bank will oversee implementation and ensure that investments comply with the Green Climate Fund's environmental, social, and governance requirements. Vietnam-based private equity firm Mekong Capital will lead capital deployment and act in the investment manager capacity.

According to Deutsche Bank, the MERF fund aims to reduce approximately 8 million tonnes of greenhouse gas emissions while supporting around 300,000 people across the region through investments in more sustainable agricultural production and supply chains.

Kamran Khan, Deutsche Bank's head of ESG for Asia-Pacific and the Middle East, said that the structure is intended to channel institutional funding toward projects that have traditionally struggled to secure long-term financing.

“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,” he said.

The fund is designed to use blended finance to attract additional institutional capital, with the initial GCF commitment expected to mobilize private investment at a ratio of roughly three-to-one.