Deutsche Bank announced its support for the launch of a new private climate investment fund in Southeast Asia, backed by the Green Climate Fund (GCF). The fund, named Mekong Earth Regeneration Fund (MERF), aims to reduce approximately 8 million tons of emissions, support over 300,000 people, and promote the transition to sustainable, climate-resilient agriculture and food systems in the lower Mekong region.

As an accredited entity of the GCF, Deutsche Bank arranged a USD 50 million investment for the new fund. This capital is expected to attract additional investment at a 1:3 ratio, meaning that every 1 USD from the GCF will leverage approximately 3 USD in co-financing from other investors. The GCF's investment serves as "seed capital", helping to de-risk the project and facilitate further capital mobilization from public and private sectors.

Deutsche Bank will oversee the entire program to ensure that the funds are used in accordance with GCF policies and international environmental and social standards. Meanwhile, Mekong Capital – the investment fund behind Pharmacity, F88, and Vua Nem – will manage the fund and execute investment activities.

Deutsche Bank is Germany's largest private and investment banking group, with years of experience in asset management, securities custody services, and international capital raising. The GCF, the world's largest climate fund for developing countries, specializes in mobilizing large-scale capital and promoting transformative programs through its global partner network.

Harvesting rice in Dong Anh, Hanoi, 5/2023. *Ngoc Thanh*

MERF will invest in agricultural enterprises and businesses within the agricultural value chain that work directly with small-scale farmers. Through these investments, the fund will support the transition to low-emission production models and better adaptation to climate change. Priority areas include: regenerative agriculture, agroforestry models, and sustainable aquaculture. The fund also aims to improve soil quality, reduce the use of agricultural chemicals, and increase ecosystem resilience.

The bank stated that the new fund is designed to address the lack of private investment capital for regenerative agriculture in emerging markets such as Vietnam and Laos. Instead of loans, MERF provides equity capital, giving businesses long-term financial resources for investment without immediate repayment pressure.

Kamran Khan, Deutsche Bank's Head of Sustainable Finance for Asia Pacific and Middle East & Africa, stated, "Blended finance models like MERF are crucial for mobilizing large-scale private capital. Combining concessional capital with institutional investment will accelerate the deployment of innovative climate solutions in markets often perceived as high-risk."

Tat Dat