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Gujarat Venture Finance Limited to float Rs. 10 billion Indo-China clean energy fund

According to reports, state-controlled Gujarat Venture Finance Limited (GVFL) will launch a Rs 1,000-crore green energy fund to attract Chinese companies, a move aimed at strengthening the trade ties between the two regions.

H C Pattnaik, executive director, GVFL, said, “The fund is specific to Chinese companies interested in setting up plants for equipment manufacturing plants in India in the fields of solar, wind, hydro and other alternative energy projects.” GVFL, which had launched a similar fund in clean energy ventures and infrastructure in January 2011, will manage the fund.

Likely to be called Golden Gujarat China fund and launched on February 17, 2012, it will be registered with markets regulator Securities and Exchange Board of India (Sebi) soon.

“As per Sebi rules, minimum 5% investment should come from anchor investors, which in this case could be the state or the Central government. The rest will come from China,” Pattnaik said. The fund will invest in equity on projects, which can be implemented anywhere in India and will use Chinese technology.

GVFL had announced the Rs 1000-crore infrastructure fund – Golden Gujarat Growth Fund Series-1 – during the Vibrant Gujarat Global Investors’ Summit 2011 held in January 2011. The company is expected to announce the first phase of closure at Rs 400 crore at the end of this month.

“The new fund is similar to the Golden Gujarat fund. We look forward to tying up with some national companies for the China fund. The project will be finalised in February during India-China finance conference,” Pattnaik added.

The state government’s focus has been to make Gujarat a hub for manufacturing solar power equipment, generation and research and development. In November, Chinese power equipment maker TBEA signed an agreement with Gujarat government to make a foreign direct investment of Rs 500 crore as part of setting up a Rs 2,500 crore Green Energy Park in the state. The Gujarat government has signed Power Purchase Agreements (PPA’s) for generation of 1,000 MW of solar power.

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