Tata Capital Ltd, a financial services subsidiary of Tata Sons Ltd and focusing on financing clean technology and infrastructure projects through its newly formed unit Tata Cleantech Capital Ltd (TCCL), has garnered support from the World Bank arm, International Finance Corporation (IFC). IFC is acquiring 19.5 per cent stake in Tata Cleantech that proposes to provide financing and advisory services to small and medium enterprises (SMEs), as well as large corporate houses in India, engaged in climate change initiatives.
IFC had said earlier this year that it would pick up to 20 per cent stake in a Tata Capital unit providing cleantech financing and advisory services. This unit was expected to have an initial equity of $20 million or around Rs 100 crore. The rest of the stake in the company is held by Tata Capital.
However, the financing activity of TCCL will be subject to NBFC registration granted by the RBI, according to a statement.
Tata Cleantech will initially focus on energy efficiency for SMEs, renewable energy generation projects (such as wind power, small hydro power, solar power, bio-mass and waste treatment) and water management projects. It also plans to expand into sustainable agriculture projects, smart grid projects, clean transportation and pollution control.
The World Bank arm had provided $50 million to PTC Financial Services Ltd earlier this year for financing smaller infrastructure firms developing sustainable and renewable energy projects. IFC has also put money into several other renewable energy firms in India in the past two years including Bhilwara Power, SunBorne Energy, NDPL Solar, Sapphire Industrial Infrastructures, Applied Solar and Azure Power.
“Tata Cleantech Capital is a focused initiative to assist (via lending and advisory services) the small, mid-sized and even large companies to promote clean technology. In this initiative, Tata Cleantech will leverage Tata Capital’s network, expertise and extensive corporate customer base. IFC’s experience and expertise in offering lending and advisory services in cleantech sectors will be an added asset to the new company,” said Praveen P Kadle, MD & CEO of Tata Capital.
“By helping establish India’s first green finance company, we will reach small and mid-sized companies that are committed to promoting clean technology,” said Lars H. Thunell, IFC EVP and CEO, who is visiting India this week.