The Australian Department of Foreign Affairs and Trade’s (DFAT) impact investment portfolio aims to effectively leverage private capital to drive positive climate and gender impacts in the Indo-Pacific region.
DFAT’s investments are impact first — focused on projects or investments that help achieve the Sustainable Development Goals, prioritising climate change and women’s economic empowerment outcomes.
The department has a portfolio of blended finance mechanisms that mobilise private finance for development outcomes, including the Australian Development Investments (ADI); the Private Infrastructure Development Group (PIDG); and the Australian Climate Finance Partnership (ACFP).
- Australian Development Investments (ADI – ADI is Australia’s flagship A$250 million international impact investment fund of funds that makes early-stage and concessional investments into promising impact investment funds in the lndo-Pacific. These funds then provide financing to small and medium enterprises (SMEs) that deliver climate and gender equality outcomes for the region.
- Private Infrastructure Development Group (PIDG) – PIDG is a multi-laterally funded, early-stage infrastructure developer and investor group of companies. It is owned and funded by six like-minded governments (Australia, the United Kingdom, Sweden, Switzerland, the Netherlands, and Canada).
- Australian Climate Finance Partnership (ACFP) – ACFP is Australia’s concessional financing facility of up to A$140 million managed by the Asian Development Bank (ADB).
Two of DFAT’s blended finance investment vehicles have recently signed deals, with ADI making a US$5 million strategic investment in the private equity fund Asia Business Builders Fund II to support small- and medium-sized enterprises (SMEs) in Vietnam, and the ACFP signing a $10 million financing agreement to promote sustainable transportation in Indonesia.
Australian Development Investments closes on Asia Business Builders Fund II
Last month, ADI announced a strategic investment of US$5 million in the Asia Business Builders Fund II (ABB Fund II), representing a pivotal step toward addressing systemic gender inequalities by empowering women entrepreneurs and supporting small- and medium-sized enterprises (SMEs) in Vietnam to embed a gender lens in their operations, products and services.
With a fund size of US$70 million, ABB Fund II is poised to deliver strong performance while catalysing systemic change in the private equity landscape.
The fund — led by a gender balanced team — will specifically target high-growth SMEs that align with ESG principles and the 2X Criteria. These include companies that prioritise women’s leadership, ownership, and workforce participation, setting new standards for gender equity in Vietnam’s private sector.
“This collaboration exemplifies our commitment to creating a more inclusive economy by empowering women and unlocking their potential as leaders, entrepreneurs, and contributors to sustainable development,” said Australia’s Ambassador for Gender Equality Stephanie Copus Campbell.
ADI will provide technical assistance to ABB Fund II and its portfolio companies to enhance their impact management systems, implement institutional-grade governance practices, and strengthen gender-focused policies. Key areas of support will include:
- Gender-Smart Investing: Develop tools for screening, due diligence, and portfolio management to integrate gender considerations.
- ESG and Safeguards: Revise ESG policies to align with DFAT Safeguards.
- Inclusive HR Policies: Enhance recruitment, retention, and workplace equity strategies to meet gender diversity targets.
- Impact Measurement: Strengthen impact frameworks with clear objectives, sector-specific indicators, and OPIM alignment.
- Value Creation Support: Equip portfolio companies with tools to adopt gender-inclusive practices.
The strategic investment was made via the Investing in Women (IW) window, which seeks to increase investment in businesses focused on benefitting women, thus contributing to greater gender equality. The IW window, with a dedicated allocation of A$21 million to ADI, is a cornerstone of ADI’s strategy to promote gender-lens investing (GLI).
ADI’s investment helped ABB Fund II achieve its final close in December 2024, ensuring the fund’s long-term sustainability and amplifying its capacity to address financing gaps for women-led SMEs.
The partnership — leveraging ABB’s expertise in value creation combined with ADI’s technical assistance — is set to create a transformative impact for women and communities across Vietnam.
Australian Climate Finance Partnership drives EV transition in Indonesia
Additionally, the ACFP, which is managed by the ADB, recently signed a $10 million financing agreement with PT TBS Energi Utama Tbk (TBS) to promote sustainable transportation in Indonesia.
The funding comprises a $5 million ADB loan and another $5 million from ACFP, who are joined by DBS Indonesia as a parallel lender.
Indonesia has the largest automotive market in Southeast Asia, and it is one of the country’s biggest sources of greenhouse gas emissions. In 2022, there were around 148 million two-wheelers in the country, but only 26,000 were electric.
A leading energy company in Indonesia, TBS has a diverse business portfolio that includes waste management, renewable energy, and electronic vehicles. In 2021, the company founded Electrum, which focuses on e-motorcycle manufacturing, battery technology, BSS, and charging infrastructure.
The latest funding will support investments by TBS in PT Energi Kreasi Bersama for procuring e-motorcycles and installing a network of battery swapping stations, which will reduce annual greenhouse gas emissions by at least 123,000 tons.
ADB Director General for Private Sector Operations Suzanne Gaboury said, “Indonesia is rapidly urbanising and seeing a surge in private vehicle ownership, particularly motorcycles. By working with TBS in this project, ADB aims to increase the reliability of e-motorcycles and expand sustainable transport options for Indonesians.
“As ADB’s first private sector financing for the country’s e-vehicle industry, the project can demonstrate the commercial viability of e-motorcycles and encourage further investments to promote their use.”
TBS Co-Chief Executive Officer Pandu Sjahrir said the collaboration “accelerates our efforts to redefine transportation in Indonesia. We aim to deliver eco-friendly, affordable, and sustainable mobility for the public, while supporting national targets to combat climate change.
“Electrum is more than just a business — it is our commitment to building a cleaner and more resilient future for Indonesia.
“Through Electrum, we aim to address key barriers that have hindered the adoption of electric vehicles, such as high upfront costs and concerns over range. By offering high-quality electric motorcycles supported by an extensive battery-swapping network, we aim to provide a solution that truly meets the needs of the public.”
Click here for more on DFAT’s blended finance mechanisms.