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Asian Development Bank injects Rs 310 crore into Welspun’s clean energy firm

According to reports, heating up the investment sentiment in the clean energy space, Asian Development Bank has made its largest ever equity investment in the sector by pumping Rs 310 crore ($50 million) in Welspun Renewables Energy (WREL).

This investment amount translates into ADB holding a stake of 13.3 per cent in WREL, the 100 per cent subsidiary of Welspun Energy, said the FIPB (Foreign Investment Promotion Board) document approving the proposed foreign investment in the company.

In addition to issuing equity shares to ADB, WREL has also issued CCDs (Compulsorily Convertible Debentures) to DEG, a subsidiary of German government-owned development bank KfW for Rs 220 crore, making this the second largest investor pool in the any renewable company in the country.

“The proposed FDI inflow by the foreign collaborator/investor is Rs 530 crore,” said the FIPB document, reviewed by ET.

While the deal has received the FIPB nod, WREL refused to comment on the development. “We would not issue any statement in this matter,” said the spokesperson of Welspun Energy.

ADB, however, said that this investment is a part of their project for the ‘Solar and Wind Development Project in India’. Through this project, ADB hopes to develop and commission a portfolio of 200 mw of solar photovoltaic power projects and 100 mw of wind power projects by March 2016.

This project will be ADB’s largest direct equity investment in renew able energy ($50 million) and will be ADB’s largest non-sovereign solar power project in size (200 mw), said ADB officials.

“ADB’s assistance will support private sector development. It will help demonstrate that profitable investments are achievable in the renewable power sub sector and, as such, will catalyse more private investments in renewable energy.
“Supported by favourable government policies for renewable power, the private sector share in the total installed capacity of renewable energy in India is expected to increase from 33 per cent in 2011 to 50 per cent in 2023,” said ADB’s statement to its Board of Directors dated November 2013, in which it stated the proposed investment of $50 million in Welspun Energy.

India received a total investment of $7.8 billion in 2013, as per Bloomberg New Energy Finance, but around 80 per cent of it was through domestic investors.

Among the foreign investors, ADB invested $30 million in NSL Renewable Power last year. Goldman Sachs has invested about $320 million in ReNew Power in two phases, making it the largest investment so far in Indian renewable energy generation industry.
Recently, NYSE listed GE announcing its foray in the clean energy space by investing $24 million in India’s largest solar power plant based in Madhya Pradesh and operated by Welspun.

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