Jan 25, 2017

Solar Energy : Financing for projects

there has been a spurt in growth of project funding based capital, for solar projects in India. All this is helped by the fact that the government has already announced plans for an increased target of 175 GW by 2022 of installations in the country. 

This translates into about Rs. 875,000 Cr ( around 145 bln USD)  of investment into the sector at the current pricing for setting up utility scale projects. Over time, this pricing may come down and hence the need for capital required may reduce a bit. Nonetheless, the capital requirement is huge and requires different capital pools to come together. 

Below is a list of some funds and organisations that have become active to help India move towards a cleaner future. This list, by its very nature is an evolving list and updates shall continue to be published. Do note that some of these are announcements and the fund may / may not finally materialize in its objectives.


1. Aditya Birla Group along with Lotus Renewables is set to launch a $100 million Global Clean Energy Fund targeted at developing countries in Asia, including India, as well as Australia. The foucs is on SE Asia market including Philipines, India, Sri Lanka, and Vietnam as well. The fund, which will start with about 5 millon USD, will be managed by Aditya Birla Group group company with an aim of targetting a 8% plus return on investments. The participation shall be, in the form of debt or equity as per the project requirements. An initial vetting of the project, and due diligence shall be carried out possibly via third party technical local consultants. One unique proposition and target shall be stressed assets, and those that are seeking a financial remedy. And they shall be looking to invest in mid sized deals, and not just the very large projects. This allows a risk balance, for the overall portfolio rather than putting in all the bets with a couple of very large projects and acts as a natural hedge. 

2. CDC Group Plc, the UK government’s development finance institution, is also planning to set up its own renewable energy platform focused on east India and neighbouring countries. 

3. Asset management firm IDFC Alternatives Ltd in a bid to create an aggregation platform, for clean tech projects, will float a platform to hold its renewable energy assets. The platform will work as a board-run entity and a professional team will manage its daily affairs separately. 

4. The Indian government is also setting up a $1.25 billion fund, which will be backed by state-run as well as private institutions, to fund renewable energy projects. State-owned institutions such as Power Finance Corp. Ltd and Rural Electrification Corp. Ltd have already committed a total of $300 million to the fund.

5. In 2015, Actis had backed Ostro Energy ( target being to set up a 1000 MW by 2019) with an initial commitment of $230 million and set up a venture to create a clean energy portfolio comprising of both wind and solar projects. It now proposes to forge a similar alliance with SolarArise

6. Amplus Energy may also be in the process of raising funds via a strategic stake sale, to be able to cater to a larger pie of solar projects that are to be set up in the country.

7. Renew Power has reportedly sold a 10% stake which has been acquired by JERA for about 200mln USD

Urja Unlimited works on bringing more such entities together, and create finance bridges for project developers who are seeking growth capital, for setting up PV solar projects. Via our international linkages, we work on low interest, capital that can help create a market place for such players to meet and work on building a clean energy portfolio.







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