Investment Strategy

Early
As an anchor investor, ADI takes additional risk and encourages co-investment
Impact
ADI invests in SMEs that deliver climate and gender equality outcomes
Catalytic 
Where there is additionality, ADI uses concessional finance to encourage co-investment

ADI uses an investment approach to meet Australia’s development objectives, with a strong emphasis on supporting climate mitigation and adaptation, and gender equality. Recognising that small and medium enterprises (SMEs) are key drivers of inclusive economic growth but often lack access to growth capital, ADI invests in SME Funds that focus on climate-related outcomes, alongside gender equality.

ADI’s strategy includes encouraging increased investment in the energy transition by promoting a just transition where women actively participate and benefit from the shift to net zero. ADI seeks to mobilise Australian and international private and institutional capital into businesses that support decarbonisation, renewable energy development, and the fulfilment of international climate commitments.

ADI uses blended finance mechanisms to attract private capital into investments with strong development outcomes. Where there is additionality, ADI uses a range of instruments such as concessional loans or first loss equity to attract additional investment. ADI invests in first time and innovative fund managers and is often one of the first investors to commit to a fund. As an anchor investor, ADI provides an important signal to co-investors proving them with the confidence to co-invest.

Achieving strong development impact, including progress on gender equality and climate action, is fundamental to ADI’s operations. Its investment strategy embeds impact, gender equality and climate impact considerations to identify and make investments in SMEs. ADI makes impact investments in countries across South Asia, Southeast Asia, and the Pacific.

Investment Windows

ADI has five discrete investment strategies within the broader investment mandate.

Climate Catalyst Window

$126 million climate window for Southeast Asia, South Asia and the Pacific. The regional climate window will provide financing for SMEs that contribute positively to the clean energy transition, climate change adaptation and climate change mitigation.

KINETIK

$50 million Indonesia focused climate investment window under the Australia-Indonesia Climate and Infrastructure Partnership. The investment window aims to unlock finance for climate-focused small and medium-sized enterprises in Indonesia, particularly those promoting clean energy systems.

Read the Launch of KINETIK Press Release.

Investing in Women

$21 million Southeast Asian focused gender lens investment window as part of the Investing in Women program. The Investing In Women Fund seeks to improve the foundations for a fair and equitable workplace for women by unlocking capital for SMEs that contribute to gender equality.

Visit the Investing In Women website.

Vietnam

$13 million Vietnam focused climate and gender lens investment window under the Australia Vietnam Private Sector Clean Energy Partnership. The Vietnam Window aims to unlock capital for SMEs in Vietnam that contribute positively to the clean energy transition, climate change adaptation and environmental objectives more broadly.

Read the Speech at Australia-Vietnam Green Economy Summit.

Emerging Impact Investment Fund
(EMIIF) pilot

$40 million Southeast Asian focused gender lens investment window (that has now been fully capitalised). Its mandate was to invest in SME Funds that provide financing to SMEs that improve the lives of communities excluded from or currently underserved by existing markets and/or have a positive impact on gender equality through their products and services, supply chains or employment practices.

Minister Conroy message for UN Climate Change Conference in Baku (COP29):

Technical Assistance Strategy

In parallel with addressing capital challenges for SMEs in South Asia, Southeast Asia, and the Pacific, ADI is committed to building the SME impact, gender lens investing (GLI) and climate investment market. It does this by providing technical assistance (TA) to the SME Funds in which it invests and their underlying SMEs.

SME Fund TA aims to support the impact and performance of SME Funds, with a focus on integrating best practices in impact management, gender lens investment and climate focused investment. SME Fund TA is carried out via training modules, with the objective to integrate impact management and GLI practices into SME Fund investment processes.

SME TA aims to support the performance and impact of select SMEs that SME Funds invest in. The SME TA helps firms embed gender equality, impact management and climate action into business strategies and operations. The SME TA is delivered by local consultants in the region.

Technical assistance is most effective when it is collaborative, flexible, demand-driven and when there is buy-in and willingness from the SME fund or SME. To be responsive to SME fund needs, other forms of TA such as investment readiness or business/financial management topics will be considered and explored together with the SME fund and SME participants.

Technical Assistance with Ascend Vietnam Ventures

With support from ADI Technical Assistance Partner, Sagana, Ascend Vietnam Ventures (AVV) developed the Startup Impact Score (SIS). The SIS is an impact measurement framework that aims to augment common impact metrics and better capture the multifaceted impact of startups in various stages, markets, and industries.

Hau Ly, Partner at AVV

Hau Ly, Partner at AVV

The SIS captures how its portfolio companies advance UN SDGs and the firm’s key impact themes: financial inclusion, quality education, and decent work and economic growth.

SIS is integrated into AVV’s investment process, enhancing both pre-investment assessments and ongoing portfolio management1. It operates on two primary dimensions: Scale and Impact Rating. Scale represents the company’s development stage, serving as a proxy for potential reach and growth, with scores adjusting as companies progress from Idea/Pre-seed to Series C+. Impact Rating is a composite score derived from five key indicators: Underserved Beneficiaries, Underserved Markets, Impactful Product/Service, Gender Inclusive Prosperity, and Equitable Workplace.

Hau Ly, Partner at AVV explained “SIS is designed to allow us to quantify a company’s impact in real-time, thus giving us a unique bird’s eye perspective on their impact potential at any given point as well as its evolution over time”.

1SIS is an iterative framework. During implementation, SIS will be subject to ongoing refinement and adjustments to ensure it will best represent AVV’s impact and align with standard impact measurement practices.