FMO, the Netherlands’ development finance company, plans to make a debt investment of $30 million (Rs 209 crore) in Kolkata-based Srei Equipment Finance Ltd (SEFL), a wholly owned unit of Srei Infrastructure Finance Ltd.
SEFL would use the entire loan for refinancing in the renewable energy segment, FMO said in a disclosure. The company would mainly utilise the money for financing and leasing equipment used for wind and solar projects.
“This transaction also provides a neat precursor to a potential green bond to be issued by SEFL in the future,” FMO said.
FMO said the investment would allow the bank to add value to and improve SEFL’s environmental and social standards, adding that the Indian company had an environmental and social management system in place for over a decade.
SEFL was established in 2006 as a non-banking financial company that doesn’t take deposits. It offers financing solutions for equipment in sectors such as construction, mining, healthcare, agriculture and information technology. The company has 89 branches across 21 states and employs over 1,700 people.
In January, Srei Infrastructure had announced a scheme of amalgamation that would help list SEFL on stock exchanges, shelving an earlier plan to launch an initial public offering. SEFL had filed its draft IPO papers in November 2017 and had received approval from the market regulator in September last year.
FMO
The Dutch investor finances projects through equity and debt investments in sectors such as agri-business, food and water, energy and financial institutions in under-served regions.
It is an active investor in India. Last month, it invested in Mumbai-based Nomisma Mobile Solutions Pvt. Ltd, which owns digital payments and loans platform Ftcash.
In April, FMO led a large Series A funding round of Rs 600 crore ($86 million) in non-banking financial company InCred Financial Services Ltd.
In March, VCCircle reported that FMO had invested $5 million (around Rs 34.5 crore) in Husk Power Systems Pvt. Ltd, which supplies off-grid power to rural areas. A person privy to the development said the company planned to use the money to expand the number of its hybrid mini-grids in the next few years.
In February, FMO co-invested along with German development finance institution DEG in a subsidiary of Avaada Power Pvt. Ltd, which was started by Welspun Renewable Energy founder Vineet Mittal.
