Dutch development bank FMO will invest $137 million (about ₹1,000 crores) in India’s Green Growth Equity Fund (GGEF), managed by EverSource Capital. GGEF is raising the capital to invest in the country’s green infrastructure sectors such as renewable energy, transport, resource efficiency, and energy services. The fund-raising was approved by South Korea-based Green Climate Fund’s (GCF) board, EverSource Capital and FMO said in a joint statement. With an $8 billion portfolio, GCF is the world’s largest dedicated climate fund.
FMO is a Dutch entrepreneurial development bank, and as an impact investor, it has been supporting sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs over the past half a century. It has a committed portfolio of 10.4 billion euros spanning over 80 countries.
EverSource Capital is a joint venture of private equity firm Everstone Capital and European solar energy developer Lightsource BP. The PE firm and Lightsource had set up Green Growth Equity Fund in 2018 with a target corpus of $710 million.
“This is the largest single country amount approved by GCF ever for a private sector equity fund focused on climate mitigation. This investment commitment strengthens our resolve and ability to work towards supporting India’s climate objectives and Sustainable Development Goals along with creating impact and value in India’s clean energy ecosystem,” EverSource Capital Chief Executive Officer Dhanpal Jhaveri said.
“The total emission reduction expected from the equity investment of the program is the equivalent of 166 million tons of CO2, while treating and generating an additional 5,700 million cubic meters of water from alternative resources for use by households, farmers and businesses,” the statement said.
India faces major climate change challenges mainly due to greenhouse gas (GHG) emission-induced warming. The country faces increasingly extreme weather events and natural hazards, putting pressure on critical natural resources such as water while damaging infrastructure and threatening livelihoods.