IFC to support renewable and clean energy initiatives in India

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IFC to support renewable and clean energy initiatives in India

By Greentech Lead India: International Finance
Corporation (IFC) will support Nereus India Alternative Energy Fund, a
$250-million fund that would focus on renewable and clean energy companies in
India, by investing about $20 million.

Nereus is the country’s first fund dedicated to renewable
energy. IFC believes that this investment will send a positive message to the
fund investment community and the growing climate fund sector.

Business Standard reported IFC’s
proposed investment comes with a cap of 20 percent of the fund’s total
commitment in companies engaged in the development, construction, and operation
of renewable and clean energy power generation assets. The fund would be based
in Mauritius.

According to IFC, India is the third-largest emitter of carbon
dioxide. By 2030, India’s share of global emissions is expected to increase 60
per cent – the largest expected percentage increase of any nation.

Thirty eight per cent of the Indian population, or around
450 million, lack access to power. The investment in this fund would help IFC
mobilise investors and address the chronic power situation in India.

IFC’s global expertise in renewable energy would enhance
the quality of the deals in this space and having IFC as an investor and a
potential co-investor would ensure strict adherence to European standards and
guidelines for quality assurance at the fund and portfolio levels.

Nereus’ portfolio would comprise seven to 10 investments
of $15-$35 million each in equity and equity-linked securities, focusing on the
development, construction, and operation of power generation assets.

The majority of new capacity is envisioned through
coal-based ultra-megawatt power plants. Hence, there is an opportunity to shift
from coal-based production to one based on distributed and renewable generation
and transmission of power.

Showing distributed renewable generation in the country
is profitable and may spur the type of widespread private sector adoption that
could help alter India’s emerging carbon emissions footprint.

Recently, The International Finance Corp
also said it may reduce its exposure to carbon projects that generate emissions
credits after 2012.

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