In a first for the US Agency for International Development (USAID) it has partnered with institutional investor, US-based Northern Lights Capital Group, to bring $100 million to India’s cleantech sector via Nereus Capital.
The Agency agreed to provide a 40% credit guarantee for a $100 million limited partner commitment to Nereus Capital’s maiden India Alternative Energy Fund. The fund has a target of $250 million, and will be managed by Northern Lights. Last year, the fund closed a $20 million commitment from International Finance Corporation, the investment arm of World Bank.
The investment decision was made at the fourth annual US-India Strategic Dialogue, during Secretary of State John Kerry’s visit to India, according to Bloomberg. It could create as much as 300-400 additional megawatts of sustainable energy capacity, equivalent to lighting the homes of tens of thousands of Indian families says Raj Shah, administrator of the Agency.
Nereus will focus on companies engaged in the development, construction, and operation of renewable and clean energy generation or those focused on independent power producers (IPPs) in segments such as wind, hydropower, biomass, and solar besides waste-to-power and large-scale energy efficiency projects. It will also build a portfolio of 7 to 10 investments of $15-35 million each.
It has already invested in an unnamed company developing a waste-heat recovery power plant, reports VC Circle.
India targets doubling renewable-energy capacity to about 60,000 megawatts by 2017 to help reduce blackouts and diversify away from fossil fuel-based power plants, which often struggle with fuel shortages.
Private equity-funded Indian wind and solar developers include Morgan Stanley’s Continuum Wind Energy Pte Ltd. and Kiran Energy Solar Power Pvt. backed by Bessemer Venture Partners, an early funder of Skype Technologies SA.
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