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PTC India Financial Services plans $100million renewable energy fund

Power Finance Corporation (PFC) of India announced the formation of a  subsidiary to focus on renewable energy projects and their funding in November last year.

New Delhi-based PFS – incorporated in 2006 – is the investment arm of power trading firm PTC India Ltd. PFS invests in projects, fuel sources, related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers like transformers, conductors, insulators, cables etc.

We had mentioned in February this year that , IFC was planning to provide $50 Mn loan to PTC India Financial Services Ltd (PFS), which will be used for lending to companies and projects in the renewable energy space in India.

PTC India Financial Services listed on the Indian stock markets in April this year.

According to reports, PFS is in talks to tie up with two foreign PE players and launch a $100 million fund.

This fund will provide growth capital to biomass, small hydro and wind energy projects with PFS coming in as lead sponsor and foreign players as limited partners.

Sources say PFS is in advanced stages of negotiations to sign an MOU and an official announcement will be made in a month.

This development comes just days after the company tied up $50 million from the World Bank to invest in clean tech projects.

“Estimates suggest that by 2020 investment in the sector will be to the tune of $100-150 billion,” said Sanjay Chakrabarti, Head – Cleantech at E&Y.

But investing in clean energy projects comes with its own challenges, say experts. Good companies are few and far in between and the risk factor is high. Also with several regulatory uncertainties, finding good investments has been a challenge for PE players.

Exit options are also unclear with not many small scale companies going in for IPOs.

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