IFC funding for green energy companies in India at $10 m

The contribution of renewable energy to the power business in India has now reached 70 per cent, compared to 10 per cent in 2000, in terms of project numbers and dollar value, according to an expert.

International Finance Corporation (IFC), financing arm of World Bank, has provided finance for renewable energy to Indian companies such as Azure Power, Applied Solar Technologies, Auro Mira Energy, Husk Power Systems and Bhilwara Energy with total amount of facility up to $10 million either through equity or debt.

This has also prompted some private equity (PE) funds to invest in the projects, Ms Anita George, Director, Infrastructure, IFC, said during a seminar here.

Considering the high cost of renewable energy, some sections of the industry believe that the projects for green energy are not viable and to arrange finance for such projects is a difficult task. However, some initiatives launched by IFC and Asian Development Bank (ADB) indicated that financing is not a problem, provided some concerns are taken care of at the initial stages itself, she said.

The seminar on “Moving towards green energy economy” was organised by the Department of Energy and Petrochemicals, Government of Gujarat, in association with Gujarat Energy Development Agency (GEDA) and Gujarat State Council of FICCI.

ADB has extended credit facility to green energy projects and its exposure to renewable energy segment through financing to private players is around 10 per cent of the total exposure in the segment. This includes funding for wind power, supercritical technology for the Ultra-Mega Power Projects, investment in the clean energy PE fund as an anchor investor and equity financing for joint ventures. It has extended the facility to the extent of $1.5-2 billion annually since the last four years.