INTERVIEW-UPDATE 1-HK investment firm targets $200 mln fund

* Environmental Investment Services to launch green fund

* Fund to invest in clean energy, waste management companies

* State policies on environment to support sector growth

HONG KONG, Oct 28 - Hong Kong-based asset management company Environmental Investment Services Asia Ltd (EISAL) plans to raise up to $200 million for a fund that will invest in companies involved in environment-related businesses in Asia.

The new fund, which EISAL plans to launch next year, will invest in companies that derive most of their revenue from green-related ventures, including waste management and clean energy, said Keith Olson, co-founder and director of EISAL.

State policies in support of environmental projects in the Asian region should bolster growth in these companies going forward, he said.

"We've seen public policy change in nearly every single country towards providing incentives toward environmental and renewable energy projects," said Olsen, who set up EISAL in March with managing director Jeremy Higgs.

Both were former executives at Bowen Capital Management, an Asia-focused asset management firm.

"The Asian region is inhabited by more than 50 percent of the world's population, the rates of ongoing environmental degradation are commensurate with the region's high levels of growth," said Olsen.

Public policy on protecting the environment has emerged strongly in the region, however.

In Japan, investors are expecting a significant rise in the use of renewable energy under a new policy to aggressively cut greenhouse gas emissions by 25 percent from 1990 levels.

China, the world's top greenhouse gas polluter, has also been increasing investment in the environment sector, offering generous cash incentives that have spawned a wave of investments in clean energy projects.

"We want to focus on companies that have a significant operating exposure to the development of technologies and services addressing environmental needs, both regionally and globally," said Olson.

EISAL's new fund will be in addition to the $35 million Green Dragon Fund they founded in 2006 while with Bowen. EISAL has taken over management of the green fund.

Since its launch in 2006, the fund had gained over 50 percent by the end of September, with stakes in companies such as Australian wind-power company Infigen Energy, Hong Kong-listed waste management company China Everbright International and Singapore water treatment company Hyflux.

The green fund also has stakes in Philippine geothermal company Energy Development Corp and Indian biofuel company Praj Industries.

"The cost of taking action to mitigate climate change and adapt to demand should also present huge economic opportunities," said Olson.

"Asian companies that now invest in low-carbon industries should reap the benefits in the longer term," he said.