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India a hotspot for solar VCs

According to reports, Solar energy, a growing favourite with venture capitalists worldwide in a $100 billion (Rs 4,50,000 crore), has another favourite now – India. Private equity firms putting their money on solar power equipment components such as modules, cells and waters are now looking at the country, moving away from advanced markets, say industry executives and analysts.

As much as $100 million (Rs450 crore) has flowed into India’s solar energy sector in the past 18 months, according to the estimates by venture capital blog VCcircle. In 2011, the sector has received more than $45 million (Rs200 crore).

According to KCIC-Asia, a firm specialising investments in Asia, most of these investments are used for building infrastructure in which India has faced tough competition from China and Taiwan.

“The tremendous scale-up in solar power generation globally has infused  encouragement to spur investments in India,” said Darius Pandole, partner at New Silk Route, a private equity firm.

The World Bank’s private sector lending arm, the International Finance Corporation (IFC) is also eyeing India’s solar sector.

“Soon, a number of financial institutions will enter India to offer funds who are presumed to emerge as the most active participants in the growth of industry” said Hemant Madal, senior energy specialist, IFC.

As our readers might be aware, Kiran Energy Solar Power Pvt. Ltd. received $30 million from New Silk Route Advisors Pvt. Ltd, Bessemer Venture Partners India and Argonaut Ventures LLC and is engaged in developing solar projects.

Azure Power had  raised about $10 million (around Rs 45 Crore) capital in a Series B round in March from International Finance Corporation (IFC) in a series B round. Its other investors include Helion Advisors and Foundation Capital. Azure Power designs, finances, owns, and operates solar power plants.

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