International Finance Corporation, the private-sector investment arm of the World Bank, is looking to invest up to $150 million (Rs 958 crore) in Aditya Birla Finance Ltd to fund renewable energy projects.
IFC proposes to invest the capital through rupee external commercial borrowing which would be the first dedicated climate finance funding for ABFL, IFC said in a disclosure.
The financing and deployment of proceeds will enable ABFL to tap the growing climate finance market and fund renewable energy projects, the firm said.
Lending to renewable energy projects is a relatively new business for ABFL and through this engagement, it will be able to leverage IFC's global expertise in the renewable energy lending to develop its project appraisal and risk management capacities, it said.
IFC said the proposed investment will result in savings in greenhouse gas emissions as it will finance power generation through renewable and climate-friendly sources.
ABFL is a fully owned subsidiary of Aditya Birla Capital Ltd (ABCL) which is the holding company for all financial services businesses of Aditya Birla Group (ABG).
In 2017, ABG undertook a restructuring exercise which involved merger of group companies Aditya Birla Nuvo (parent of ABCL) and Grasim and subsequent demerger and listing of ABCL. The exercise has now been completed and ABCL got listed on 1 September 2017. Grasim holds 56% in ABCL, promoters hold 17% and balance is held by public shareholders.
Last week, IFC proposed to provide debt financing worth Rs 960 crore ($150 million) to Mahindra Renewables Pvt. Ltd to construct a 250 MW solar power plant at Rewa Ultra Mega Solar Park in Madhya Pradesh.