CDC Group, the UK’s development finance institution (DFI) and impact investor, has announced an investment of $70 million into the Green Growth Equity Fund (GGEF), India’s first dedicated climate change fund.
The fund is managed by EverSource Capital, a joint venture between Everstone, one of India’s leading private investment groups, and Lightsource BP, BP’s renewable energy platform, CDC said in a statement.
The PE firm and Lightsource had set up GGEF in 2018 with a target corpus of $710 million (around Rs 5,300 crore). In April this year, Dutch development bank FMO had decided to invest $137 million (Rs 1,004 crore) in the fund.
GGEF targets raising equity capital up to $940 million (about Rs 7,036 crore) for India’s green infrastructure sectors such as renewable energy, transport, resource efficiency and energy services.
Last month CDC announced its ambition to invest up to $1 billion in climate funding in India over the next five years (2022-2026).
With CDC’s investment, GGEF will finance the development of six to eight ‘green infrastructure’ companies in India.
“India is an incredible exciting market for renewable energy. Our investment in GGEF will consolidate CDC’s role in India as a staunch supporter of the country’s low carbon future,” said Srini Nagarajan, managing director and head of Asia at CDC.
Over the last four years, CDC has invested over $1 billion in climate finance across Africa and South Asia. The most recent announcement builds on CDC’s existing $2 billion portfolio in India, further demonstrating the DFI’s commitment to helping mobilise and accelerate climate investment in the country and showcases CDC’s Climate Change Strategy in action.
GGEF’s investment portfolio includes utility-scale renewable energy platform Ayana Renewable Power (that targets 6+ GW of operating assets), Radiance Renewables, e-mobility platform GreenCell Mobility, EverEnviro and Kathari, which aims to be India’s largest water and wastewater management platform.
Recently in April, EverEnviro Resource Management, owned by GGEF, acquired stake in waste manager IL&FS Environmental Infrastructure & Services and its five subsidiaries.
GGEF adopts a ‘platform model’ which means it sets up a company from scratch in a sector of interest and then grows the platform by making acquisitions of other companies in the sector.
By consolidating lots of smaller companies with similar business models under one roof, the platform aims to achieve operational efficiencies and scale, to improve profitability and building a company of sufficient size to attract a buyer.
Dhanpal Jhaveri, CEO, EverSource Capital, and vice-chairman, Everstone Group, said, “We are committed to bringing positive climate impact by catalysing capital for and investing in high growth platforms and businesses. These businesses will contribute to the Indian government’s ambitious climate goals and renewable energy targets.”