International Finance Corporation (IFC), a private sector investment arm of the World Bank Group, is proposing to invest in an upcoming investment vehicle called Climate Catalyst Fund that will mobilise additional capital for co-investments in private equity funds focused on low-carbon and climate-friendly projects and companies across all emerging markets.
IFC will have an exposure of 20 per cent of total commitments made to the Climate Catalyst Fund, subject to an overall cap of $75 million, it has said.
The primary objective of the Climate Catalyst Fund is to stimulate the development of climate funds and boost climate-friendly projects & companies which are expected to play a key role in accelerating the growth of investment in renewable energy and other low-carbon solutions.
It will be seed-funded by IFC, which also expects global institutional investors to infuse funding. The fund will be managed by IFC Asset Management Company, LLC, a wholly owned subsidiary of IFC.
IFC has been actively investing in Indian cleantech firms in the recent past, putting money in renewable energy and other low-carbon solutions firms. In June 2011, it invested $4 million or Rs 20 crore in Sapphire Industrial Infrastructures Pvt Ltd, a subsidiary of Moser Baer Clean Energy Ltd. Sapphire Industrial is constructing a 5 MW solar plant at Sivaganga, Tamil Nadu.
The firm has also put money in three other solar power-related firms in India in the past two years including NDPL Solar, Applied Solar and Azure Power. These three investments add up to around $46 million, together in debt, equity and quasi-equity forms.