Dubai’s Alcazar Energy raises $490m for second fund

London — Dubai-based private energy firm Alcazar Energy said it has raised $490m for a second renewable energy fund backed by the US International Development Finance Corporation as it looks to build out utility scale projects in emerging markets.

Alcazar Energy Partners II was also backed by Austria’s development bank and several industrial groups, co-Founder Daniel Calderon told Reuters, and ended just shy of a $500m target despite a tough fund-raising environment.

The new backers join an existing group of leading investors including the European Bank for Reconstruction and Development, the Asian Infrastructure Investment Bank and insurer Allianz, which signed up before the first close of the fund in 2022.

The second fund has already begun building a portfolio of assets in the western Balkans region, with two wind farms totalling 456MW,  part of fund strategy to develop more than 1.6GW  of clean energy across a range of markets.

Once operational, the fund’s investments are set to mitigate 3-million tonnes a year of greenhouse gas emissions, while generating enough electricity to power more than 300,000 households, Alcazar said.

The western Balkans is a particularly attractive as an investment destination as the region looks to wean itself off climate-damaging coal power and a reliance on fossil fuel imports from countries including Russia.

Economies not in the European Union are also being incentivised to cut their grid emissions to help exporters avoid taxes when they sell into the bloc, which is setting tougher rules based on the carbon content of some imports.

“If you reduce (use of fossil fuels) … and make it heavier on wind and heavier on solar, then you’re going to be helping the local economy in a big way,” Calderon said.

Reuters