The International Finance Corporation (IFC) will invest up to $15 million in equity and provide up to $40 million in debt financing to Kolkata-headquartered Simran Wind Project, the firm said in a statement.
The Company is expanding its wind power capacity to about 126.9 MW, up from 50.4 MW in Muthianpatti, Amdhapuram and Rasta in the state of Tamil Nadu, the statement said.
The $15 million provided by the IFC will go to finance Simran’s pipeline projects while up to $40 million will be used by the company for the energy capacity expansion. Tenor of the $40 million debt financing will be up to 12 years with a grace period of up to 3 years, the statement noted.
The IFC Post-2012 Carbon Facility proposes to forward purchase up to 1.75 million certified emission reductions – a form of carbon credits- to be generated through 2020 by Simran’s wind power projects in exchange for a percentage of the carbon credit spot price at the time of delivery, “subject a floor and a cap”.
The IFC is involved in several wind as well as other renewable energy projects across different geographies. Simran will use IFC's global knowledge pool to scale up its business and build up a sizeable portfolio of renewable energy assets.
“Through this investment, IFC supports a company which will add approximately 200MW of renewable energy generation capacity over the next 2 years to meet the growing electricity demand in India”, the firm said.
The supply deficit in India’s power market is expected to continue in the medium term. Coupled with a regulatory body which has been encouraging of private equity investment in the sector, firms like The Blackstone Group, Kohlberg Kravis Roberts, Actis and 3i are among those which have backed assets in India’s clean energy space.
Venture capital and private equity funds invested more than $10 billion in cleantech globally in the first half last year, up from $5.6 billion in the corresponding period in 2009, according to data from Clean Energy Pipeline, a division of London-based data and research service VB/Research.