As Panchabuta had earlier mentioned, World Bank and International Finance Corporation (IFC), have mentioned that they will double loans given to renewable energy projects to $2 billion (Rs9,103 crore) in the next three years in India. Further, the lending will primarily be for power generation and energy efficiency projects. The World Bank largely funds government projects while the IFC caters to the private sector.
As readers of Panchabuta are aware, IFC has been one of the most active investors in the Renewable Energy space in India in terms of both equity and debt funding. Last month , International Finance Corporation (IFC), the investment arm of the World Bank, announced its plan to set up $55 million debt-equity investment (about Rs 248 crore) in Simran Wind Project, the clean energy arm of Kolkata-based listed firm Techno Electric and Engineering Company.
Earlier last month, the International Finance Corporation (IFC) had announced corporate equity financing of up to $15 million (around Rs 69 crore) to Andhra Pradesh-based Shalivahana Green Energy Limited (SGEL), a privately owned entity producing power based on biomass. The fund would be used by the company for its projects.
Now according to reports, as private equity investments in India doubled to $8 billion In 2010, IFC, the investment arm of the World Bank emerged the country’s most active PE player with 25 investments across sectors such as energy, banking and financial services. For the last three years IFC has been investing $1 billion every year in a slew of infrastructure, renewable energy and finance companies across the country. With a portfolio of $3.6 billion, India is now IFC’s largest country of operation. The combination of growth and development is what drives the investment focus here, explains Thomas Davenport , South Asia Director, IFC.
We ideally invest $5-10 million in a company. It’s only rarely that we make an investment of $1 million as in the case of Husk Power, which we did for the tremendous development impact that the company has (it reaches 200,000 homes). Our sweet spot of investment is in the $15-20 million for equity deals, he further added.
In India, the National Solar Mission is heating up interest in the sector. In markets with a huge need for power, renewable energy is taking off. Also in areas such as biomass which requires less subsidy, you have unique models emerging here such as Husk Power, he mentioned.
This statement comes at a crucial time when a number of solar projects allotted under the National Solar Mission are running with a tough schedule and need to achieve financial closure in the month of June to avoid penalties and delays.