International Finance Corporation (IFC) is investing $15 million in equity financing in Shalivahana Green Energy Ltd, a Secunderabad-based biomass power company. The new round of funding will help the company enhance the capacity of its existing biomass power projects by 200 MW. Shalivahana’s facilities are spread across Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Tamil Nadu.

Besides the equity funding, the World Bank arm, through its post-2012 carbon facility, will also commit to purchase up to 1.5 million certified emission reductions (CERs) from energy projects developed by Shalivahana during 2013-2020. IFC will pay for a pre-agreed percentage of the spot price of the CERs at the time of delivery, subject to a minimum price.

Shalivahana Green Energy, which claims to be one of the largest biomass power companies in India, has a capacity of 50.4 MW. Axis Infrastructure Fund 1 and IL&FS Renewable Energy Ltd had invested Rs 90 crore ($18 million) in Shalivahana back in June, 2009. Shalivahana Group, promoted by M. Komaraiah and family, is also involved in other businesses like civil construction, education and cement production.

“IFC’s support will help us raise funds, add credibility to our work and raise the generation capacity of our portfolio over the next four years. The post-2012 carbon facility will help us generate sustainable revenues in the long run, in spite of the uncertainties in the global carbon market,” said M. Komaraiah, chairman and managing director of Shalivahana Green Energy Ltd.

“Improving access to regular and clean power supply is a key strategic priority for IFC in India. Our Post-2012 carbon facility will provide the Shalivahana Group with a high quality revenue stream from CERs up to 2020, to strengthen the viability of their projects,” said Thomas Davenport, IFC director for South Asia.

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