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Tata Capital to set up Private Equity fund for clean energy

According to reports, after floating a joint venture (JV) with International Finance Corporation (IFC) to lend Rs 5,000 crore for renewable energy projects, Tata Capital is planning to launch a PE fund with the international body to provide equity support for such projects.

“Any project requires both equity and loan support. Our JV with IFC will provide loan support for renewable energy projects in solar and wind energy segments, while the PE fund will provide equity support. We will work with IFC for the PE fund too,” Tata Capital MD and CEO Praveen P Kadle said.

Refusing to disclose the size of the fund since it was too early, Kadle said it will be of a ‘reasonably good size’ and a large part of the finance for the PE fund will come from international markets.
Tata Capital, an NBFC with about Rs 20,000 crore asset under management, is a 100 per cent subsidiary of Tata Sons. About 65 per cent of the company’s business comes from lending to mid-sized companies for working capital requirement and capital expenditure needs. The rest comes from retail lending in the home loan and car loan segments.
Tata Capital’s 80:20 joint venture with IFC, called TataCleantech Capital, aims to disburse loans worth about Rs 5,000 crore over the next five years to finance projects in solar energy, wind mills, water management and waste management sectors, among others.

The JV will raise fund through borrowing from international markets, special lines of credit from multi-lateral agencies as well as domestic borrowing. Tata Capital’s presence in the renewable energy space is very small at about Rs 100 crore, he said.

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