Neev Fund has invested $5 million (Rs 35.4 crore) in biomass company Punjab Renewable Energy Systems Pvt. Ltd, making it the 10th investment for the private equity fund. Biomass is organic matter used as a fuel, especially in a power station for the generation of electricity.
The funds will be used for the company's expansion of biomass supply chain in underdeveloped states to enable a safe and sustainable environment, said Neev Fund in a statement.
Punjab Renewable Energy Systems, which was incorporated in 2011, is an end-to-end biomass value chain management company involved in the collection, processing, storage and supply of biomass such as paddy straw, cotton stalk, soya husk, maize cob and mustard stalk to biomass-based power plants and process industries like pharmaceuticals, distilleries and sugar. The company provides biomass as a raw material to clients for energy or conversion into biofuels.
Monish Ahuja, managing director, Punjab Renewable Energy Systems, said that Neev Fund's focus on environmental, social and governance (ESG) aspects of the business will help the company grow into a world-class institution and make an impact on climate change.
Manav Bansal, chief investment officer, Neev Fund, said, "Surplus biomass can be used by power plants to produce power and new generation refineries to produce bio-ethanol. However, continual availability of biomass remains a challenge." He added, "Punjab Renewable Energy Systems will address this market barrier by guaranteeing biomass supply throughout the year by empowering village-level entrepreneurs and farmers."
Intellecap served as the investment banker for the deal.
Neev Fund, which is backed by public sector lender State Bank of India (SBI) and UK’s Department for International Development, is a $110 million private equity fund. The fund is managed by SBICAP Ventures Ltd, which is the wholly owned subsidiary and investment banking arm of SBI. It has been providing growth capital to small infrastructure projects in India with an average ticket size of $5-10 million.
Launched in 2015, the fund invests in renewable energy, road, agricultural supply chain, warehouses and cold storages, and urban infrastructure like water and sanitation as well as waste management.
Its investments last year include solar power solutions provider SunSource Energy, agri-logistics company Leap India Food and Logistics Pvt. Ltd, skills development firm Mahendra Educational, and dialysis firm RAHI Care.
In 2017, it invested in cold chain logistics service provider Crystal Logistic Cool Chain Ltd and dairy startup Milk Mantra Dairy.