Mumbai: The government’s National Investment and Infrastructure Fund of India (NIIF) on Wednesday announced a partnership with the UK government to launch Green Growth Equity Fund (GGEF), an alternative investment fund registered with the Securities and Exchange Board of India (Sebi).
NIIF and the UK government have committed £120 million each for the fund which will be managed by EverSource Capital, a joint venture of home-grown private equity firm Everstone Group and Lightsource BP.
Everstone is a multi-asset investment firm with assets under management of about $4 billion while Lightsource is a global market leader in renewable energy development and management with $3 billion of capital invested across over 2 gigawatts of solar projects globally.
British oil and gas major BP Plc owns a 43% stake in Lightsource BP. Green Growth Equity Fund aims to raise £500 million from international institutional investors to invest in areas such as renewable energy, clean transportation, water, sanitation, waste management, emerging technologies and other similar industries in India.
“The joint initiative and commitment of India’s National Investment and Infrastructure Fund and the UK government to invest in and develop green infrastructure in India is a unique and amazing investment opportunity. By using a pooled investment vehicle and a public plus private partnership approach, global investors will get the opportunity to be part of this exceptional investment platform," said Sameer Sain, co-founder and chief executive of Everstone Group.
On 5 April, Mint reported that NIIF was in talks with private equity firm Everstone Group for a tie-up to manage the Green Growth Energy Fund. NIIF, an institution sponsored by the government of India, is a collaborative investment platform for international and Indian investors.
The government had set up the Rs40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects.
“NIIF is delighted to be an anchor investor in GGEF, which will be the first investment for NIIF’s Fund of Funds. GGEF will provide investors with a vehicle to invest at scale into one of the largest and most attractive clean energy markets in the world. Everstone’s capabilities of building successful operating companies in India and Lightsource’s global renewable energy experience will provide a strong platform for EverSource Capital to successfully execute GGEF’s investment strategy," said Sujoy Bose, chief executive officer of NIIF. Everstone Group and Lightsource BP will collectively invest £20 million in the fund.
“Broadly a third of the fund would go into the regulated space, which is grid-connected renewable assets such as wind, solar, mini hydel and biomass; a third would go into off-grid strategies and a third into other clean-tech strategies around water, electric mobility etc. The final close of the fund should take about 9-12 months," said Dhanpal Jhaveri, managing partner (private equity), Everstone Capital.
As the economy keeps building out, these sectors will be increasingly more interesting, he said.
“These sectors are now operating on a competitive basis where the economic model of all these businesses can be self-sustaining without any requirement for subsidies. And therefore it competes very well with traditional sources of energy and is a big opportunity," Jhaveri added.