Shariah-oriented Malaysian infrastructure investment trust to be overseen by CFM and Argos Partners
The Malaysia Climate Infrastructure Fund (MCIF) is a new venture that promises to bring about a significant change in the country's infrastructure landscape. Co-managed by Climate Fund Managers (CFM) and Argos Partners, this shariah-compliant, private equity infrastructure fund is poised to make a difference in sectors tied to climate and sustainability.
The MCIF's investment focus spans renewable energy, transportation, digital infrastructure, water, and wastewater management. The fund typically makes equity investments in the range of $15 million to $30 million, depending on project specifics and stage.
This fund plays a strategic role within Malaysia’s broader Dana Pemacu initiative, launched by the country’s public sector pension fund KWAP in May 2024. Dana Pemacu aims to generate RM6 billion in investment to enhance Malaysia’s private market ecosystem. It supports conventional and shariah-compliant funds across three main asset classes: private equity, infrastructure, and real estate.
The Dana Pemacu initiative targets sectors beyond infrastructure as well, including food security, education, energy transition, the digital economy, healthcare, and financial inclusion. Within Dana Pemacu, the MCIF contributes by deploying capital into critical infrastructure aligned with Malaysia’s economic, environmental, and social sustainability goals, while leveraging a co-general partner structure to strengthen domestic investment capacity and drive sustainable growth.
CFM, as a co-manager, brings global climate finance expertise to the table. Managing multiple climate-focused infrastructure funds concentrated on mitigation and adaptation efforts in emerging markets, CFM's experience informs MCIF’s development mandate. This mandate explicitly aims for measurable environmental and social impact alongside financial returns.
The MCIF's shariah-compliant status may help broaden its appeal by opening access to a broader pool of investors, particularly those with mandates or preferences for Islamic finance. With an initial anchor investment of RM500m (€102m) from KWAP, the fund aims to raise a total of $500m (€429m) from various institutional investors.
The MCIF's success will not only contribute to Malaysia's private market ecosystem but also support the government’s broader strategy to build a resilient, inclusive, and green economy. As the world grapples with the challenges of climate change, the MCIF presents a beacon of hope for sustainable infrastructure investments, not just in Malaysia, but across Asia and Latin America, with at least 40% of its capital allocated to Malaysian opportunities.
- The Malaysia Climate Infrastructure Fund (MCIF), a shariah-compliant private equity infrastructure fund, is focused on energy transition, renewable energy, digital infrastructure, transportation, water, and wastewater management, aligning with Malaysia’s economic, environmental, and social sustainability goals.
- As part of Dana Pemacu, a Malaysian initiative launched by the public sector pension fund KWAP in May 2024, the MCIF specifically aims for measurable environmental and social impact along with financial returns, providing opportunities in sectors such as education, financial inclusion, and the digital economy.
- With an initial anchor investment of RM500m (€102m) from KWAP, the MCIF aims to raise a total of $500m (€429m) from various institutional investors, potentially broadening its appeal by opening access to Islamic finance investors with mandates or preferences for such investment.
- The successful implementation of the MCIF in Malaysia can serve as a model for other regions, as the world pursues sustainable infrastructure development in the face of climate change challenges, with at least 40% of the fund's capital allocated to Malaysian opportunities, and potential expansions across Asia and Latin America.
