International Finance Corporation plans to invest $40 million (Rs 260 crore) in Tata Cleantech Pvt. Ltd, the World Bank’s private-sector arm said in a disclosure.
IFC said it will invest in the Tata Group company via secured non-convertible debentures, structured as a Green Bond, in one or more tranches.
Tata Cleantech will use the proceeds to finance wind, solar and other climate finance projects.
The non-banking financial company provides finance and advisory services for projects in renewable energy, energy efficiency, waste management, water management and cash flow-based infrastructure finance.
It began its business operations in 2013-14. As of March 2017, it had assets under management of about Rs 2,400 crore.
IFC already owns a 19.5% equity stake in Tata Cleantech. Tata Capital Ltd, the diversified group’s financial services arm, holds an 80.5% stake in Tata Cleantech.
The World Bank arm said its participation in the Green Bond issue will help Tata Cleantech with long-tenor funding and assure other investors about the credibility of the bond offering.
IFC has an active direct private equity-style investment practice in India. It also lends to firms and has an active limited partner, or LP, portfolio in India where it backs private equity and venture capital funds.
In the renewable energy sector, IFC last year committed an equity investment of up to $125 million in Hero Future Energies Pvt. Ltd.
Last year, IFC also decided to facilitate debt funding worth around $177 million to Ostro Energy Pvt. Ltd, a renewable energy platform backed by emerging markets-focused private equity major Actis.
Earlier this year, IFC said it planned to invest $15 million in Clean Max Enviro Energy Solutions Pvt Ltd, a renewable energy service company.
India’s renewable energy sector has seen a lot of activity over the past couple of years after the government set ambitious capacity addition targets. The government aims to achieve 175 GW of renewable power generation capacity by 2022. This includes 100 GW of solar and 60 GW of wind power capacity. India’s renewable energy capacity is currently around 44 GW.
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