International Finance Corporation (IFC) plans to invest $20 million to pick an undisclosed stake in NSL Renewable Power Pvt Ltd, which is a part of the privately held NSL Group and counts among its sister companies Blackstone-backed Nuziveedu Seeds Ltd. The fund will be used for expanding the power generation business of Hyderabad-based NSL Renewable Power that is into wind and biomass power generation, and now entering the hydro-electricity space.

At present, NSL Renewable Power has about 110 MW of existing operating assets comprising two biomass power plants of 6 MW each and two wind power plants – the 50.4 MW utility in Bhimasamudra and 47.5 MW project in Jagalur, both located in Karnataka.

The company is in the process of setting up two medium scale (100 MW and 44 MW) and two small scale (5 MW and 6 MW) hydro projects. It is also implement seven wind power projects, which are in various stages of conceptualisation and development.

The total project cost is estimated at about $210 million as of now, and IFC proposes to invest up to $20 million in equity, alongside other unnamed investors.

This will support the business diversification efforts of the four-decade old and privately held Nuziveedu Seeds Group (NSL Group). Apart from the seeds business, the NSL Group has exposure in sugar, IT infrastructure (primarily IT parks), textiles and renewable energy business. NSL Renewable Power is a wholly owned private firm of the promoter family.

In December, 2008, the flagship group firm Nuziveedu Seeds Ltd had raised money from the buyout giant Blackstone. The US-headquartered private equity firm said that it was investing $50 million (which can go up to $80 million) through a fresh issue, for less than 25 per cent stake in the company. The firm planned to use the funds to develop and market seeds of rice, corn and vegetable hybrids. It also intended to use the money for further expansion, besides coming up with a research and development unit.

Other group firms have also raised money from private equity firms. The group’s wind turbine manufacturing firm ReGen Powertech has investments from Everstone Capital and is now looking at further infusion of funds from PE firms. General Atlantic was reportedly one of the prospective investors interested in the company.

Debt Funding For Paradeep Phosphates, Vishwa Infra

IFC has been on an investment drive and announced fresh investments almost every week since the beginning of this year. It has also said that it will lend $55.5 million to two separate local firms, taking its total committed capital (equity+debt) since January 1, 2011, to $425.5 million.

It will lend $50 million to fertiliser company Paradeep Phosphates, which is part of the newly christened Adventz Group, led by Saroj Poddar. Adventz houses many of the group firms promoted by late industrialist KK Birla. The loan will go to part-fund the $120 million capacity expansion programme of the firm’s Orissa plant.

IFC is also lending $5.5 million to part-finance the estimated cost of $39 million for two water/waste water projects of Axis Private Equity and NEA-backed infrastructure firm Vishwa Infrastructure & Services that focuses on water and water services.

Founded almost two decades ago by a group of technocrats, Vishwa Infra’s founders together hold about 53.40 per cent stake in the company while the balance is owned by Axis PE (35.60 per cent) and US-based venture capital fund New Enterprise Associates or NEA (11 per cent).

The two projects (Khandwa water supply project and Kolhapur sewage treatment project) are expected to finance the bulk of its cost or $32 million through central government programmes and the balance has to be funded through debt/equity. The proposed IFC investment is an A loan of about $5.5 million.

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