GGEF targets raising equity capital up of $940 million and has National Investments and Infrastructure Fund (NIIF) of India and the UK government’s Department for International Development as anchor investors
New Delhi: Dutch development bank FMO will invest $137 million in Green Growth Equity Fund (GGEF), managed by EverSource Capital, that invests in India’ green energy space such as clean energy, transportation, resource efficiency and energy services.
GGEF targets raising equity capital up of $940 million and has National Investments and Infrastructure Fund (NIIF) of India and the UK government’s Department for International Development as anchor investors. Earlier BP Plc announced a $70 million investment in GGEF
“The Board of the Green Climate Fund (GCF) has approved Dutch development bank FMO’s proposal to accelerate private and public sector investment in India’s green infrastructure projects," FMO and EverSource Capital said in a joint statement on Friday.
With a $8 billion portfolio, GCF is the world’s largest dedicated climate fund.
EverSource Capital, an equal joint venture between private equity firm Everstone Capital and global solar project developer Lightsource BP has invested in Radiance Renewables, a distributed renewable energy platform. It develops, owns and operates assets for residential, commercial and industrial customers and has a 1.5 gigawatt (GW) operating portfolio target in four years.
“The total emission reduction expected from the equity investment of the programme is the equivalent of 166 million tons of CO2, while treating and generating an additional 5,700 million cubic meters of water from alternative resources for use by households, farmers and businesses," the statement said.
India’s green energy space has been witnessing significant traction, with a global shift to green energy to address growing environmental concerns.
“Through the Green Growth Equity Fund (GGEF), managed by EverSource Capital (which is also the Executing Entity (EE) of the approved GCF commitment), the Dutch development bank will invest USD 137 million in the energy value chain, water, waste and transport sectors that promote low carbon and climate-resilient initiatives in line with India’s climate objectives and Sustainable Development Goals. The project is FMO’s second collaboration with the GCF, following the USD 100 million that the GCF invested in Climate Investor One in 2019," the statement added.
Green finance will be among the priority themes at the 26th session of the Conference of the Parties (COP 26) to the United Nations Framework Convention on Climate Change later this year in Glasgow. An investment of ₹4.7 trillion has been made in India’s renewable energy space in the last six years, with an expected ₹1 trillion investment opportunity annually till 2030.
“The total investment needs to ensure low-carbon and climate-resilient pathways for India is estimated at USD 2.5 trillion over 2016-2030," the statement said.
India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, to help reduce its carbon footprint by 33-35% from the 2005 levels, as part of global climate change transition commitments adopted by 195 countries in Paris in 2015. India currently has an installed renewable energy capacity of 89.63GW, with 49.59GW capacity under execution.