US government agency Overseas Private Investment Corporation (OPIC) is planning to invest around $300 million in new private equity investment funds focused on renewable technologies in emerging markets. OPIC said, in a statement, that this is one of the largest initiatives by the US Government to support the international effort to mitigate climate change.
OPIC, formed in 1971, plans to call for proposals from private fund managers from December 15 until mid-February. OPIC will look at funds which invest in renewable energy, including solar, wind, hydro, tidal, geothermal power as well as waste and biomass.
Investments in agriculture, land, and water may include efficient irrigation, cold storage, transportation, water treatment, sustainable forestry, natural resource preservation, and forest rehabilitation will also be looked at. It will also back funds eyeing energy efficiency products, systems and equipment, emissions control, and waste management.
This comes soon after OPIC invested $100 million in Global Environment Fund's $300-million South Asia Clean Energy Fund. OPIC has a pipeline of nearly $300 million investments in clean energy and energy efficiency projects in India. The US government's arm recently backed solar power producer Azure Power's $40-million investment to develop a 15 MW solar PV power plant in Gujarat.
There are several PE firms which are raising clean energy funds with India as primary or one of the focused geographies. These include BTS Advisors' clean energy fund, Clean Resources Asia Growth Fund (managed by CLSA Capital Partners) and the Renewable Energy Asia Fund (managed by Berkeley Energy).
“When President Obama and global leaders negotiated the Copenhagen Accord in December 2009, they included a financial commitment to help developing countries reduce their greenhouse gas emissions and adapt to the effects of climate change. OPIC-supported investment funds represent an important and innovative step toward the realization of that goal,” said OPIC President and CEO Elizabeth Littlefield.