In fiscal 2011, IFC, the private investment arm of the World Bank, invested $18.7 billion across 513 projects globally with approximately $1 billion directed at private companies in India. As one of the country’s largest private equity investors, IFC’s strong focus on the clean energy sector in the country will increase according to Karin Finkelston, the firm’s newly-appointed vice-president for Asia. In an exclusive interaction with ET’s Archana Rai, Karin Finkelston explains why growing green house gas emissions across developing nations is driving greater focus on the clean technology sector for IFC.
What are the big bets for IFC in India?
In the coming year, we will again invest up to $1 billion in India. Probably, a quarter of that will go towards clean technology investments. As a strategic investor, we will back market-driven businesses in infrastructure, access to finance for small and medium enterprises, and fighting climate change through clean energy and energy efficiency, as well as investments in socially important sectors such as water and health care.
Is rising inflation and the political graft issues dampening India sentiment? How does IFC view investment opportunities here?
We are excited about the energy here both from the government and also from the entrepreneurial sector. In China, there is a model based on growth in manufacturing and investments. In India, there is a different model, with greater growth coming from the services side. The demographics show that jobs have to be created, there has to be greater momentum in growth, we see an increase in investment. There is a big role for IFC in areas like infrastructure and power in emerging areas like solar and wind energy.
The clean technology focus for IFC has been pretty strong despite dipping interest in the sector globally – for example IFC’ s newest deal in the Tata Capital-led green finance company, FinCo. What is the thinking behind the big push in this sector?
We want to expand the private sector’s role in fighting climate change. We have financed the first grid-tied solar rooftop plants with North Delhi Power Limited, and we have invested in an off-grid project in Bihar (Husk Power). We see these as growing opportunities as the high level of greenhouse gas emissions in Asia call for new technology that can use energy more efficiently and create a growth pattern that is not as energy intensive. To do this we need to pilot innovation in these sectors.
Home » CleanTech/ Renewable Energy » IFC to invest upto a $1 billion in the coming year in India -Karin Finkelston, Vice President Asia