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ReNew Power, Northern Arc get debt funding from US development bank
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The US International Development Finance Corporation (DFC) is extending about $300 million in loans to a bunch of Indian companies including green energy developer ReNew Power Pvt. Ltd and non-bank lender Northern Arc.

The loans are part of $1 billion of investments that will be extended to companies in Africa, Latin America, the Indo-Pacific, and emerging markets, DFC said in a disclosure.

“These projects will uplift some of the most underserved communities around the world,” said DFC chief executive Adam Boehler.

The projects will strengthen health systems, bolster food security and support other highly impactful development outcomes, DFC said.

In India, DFC is offering $142 million in debt to ReNew Power to help the company develop and operate a 300-megawatt solar power plant in Rajasthan.

Another 100-megawatt solar power project in Rajasthan operated by Sitara Solar Energy Pvt Ltd received a $50 million loan. Besides, Paryapt Solar Energy Pvt. Ltd received $27.3 million in loan to build and operate a 50-megawatt solar power plant in Gujarat.

DFC has also offered debt capital to companies that help expand access to financial services for women, small businesses, and other underserved groups at a time when capital is in desperate need.

Northern Arc received a commitment of $50 million from DFC. It will use the money to extend loans to businesses that expand access to water, sanitation and food or advance women’s economic empowerment in India.

“The transaction will allow us to support small and mid-sized NBFCs that are unable to attract debt funding from investors, especially after the onset of the Covid-19 pandemic and the resultant lockdown,” said Bama Balakrishnan, CFO of Northern Arc.

In order to increase access to education in India, DFC has extended a $14.6 million loan guarantee to World Business Capital that will support the expansion of Avanse Financial Services’ student loan programme.

As part of efforts to help small dairy farmers in India, DFC has extended a $10 million loan to dairy company Milk Mantra. The loan will help the company expand its operations in eastern India.

DFC has also provided a $2.7 million loan guarantee to Stellapps Technologies to help it advance innovative solutions that streamline the dairy value chain.

It has also provided $371,000 in technical assistance to Milk Mantra, which sources milk from more than 60,000 smallholder farmers—many of whom are women. The technical assistance is intended to enhance the impact of a loan by sharing the costs of services including farmer training and a digital financial services programme.

DFC also announced two equity investments. This includes a $20-million equity investment in online meat retailer Freshtohome. However, it is not clear if this is the same $20 million investment announced by Iron Pillar in August last year. DFC is a limited partner in Iron Pillar. A query to Iron Pillar didn't elicit any response immediately.

The American development bank also announced a $30 million investment in South Asia Growth Fund II to support businesses in the energy, water, and food sectors across India.

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