Green Growth Equity Fund

In News

Through the Green Growth Equity Fund (GGEF), managed by EverSource Capital, the Dutch development bank FMO will invest USD 13 million.

About

The Board of the Green Climate Fund (GCF) has approved Dutch development bank FMO’s proposal to accelerate private and public sector investment in India’s green infrastructure projects.

The Dutch development bank will invest USD 137 million in the energy value chain, water, waste and transport sectors that promote low carbon and climate-resilient initiatives in line with India’s climate objectives and Sustainable Development Goals.

The project is FMO’s second collaboration with the GCF, following the USD 100mln that the GCF invested in Climate Investor One in 2019.

India faces major climate change challenges largely 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 the livelihoods of its population.

There is a clear need for far-reaching mitigation and adaptation measures, since GHG emissions in India are the third-largest in the world, contributing to 7% of global emissions and temperature rise.

The total investment needs to ensure low-carbon and climate-resilient pathways for India is estimated at USD 2.5 trillion over 2016-2030. An upcoming study by Climate Policy Initiative (CPI) finds that India is mobilizing less than 25% of the investment needed to reach this target (CPI, 2020). These mitigation and adaptation gaps are especially evident in the infrastructure sector, with the government facing budgetary constraints and limited capacity to structure and deliver green infrastructure projects.

That is why the EverSource Capital managed GGEF targets raising equity capital up to USD 940 million for India’s green infrastructure sectors such as renewable energy, transport, resource efficiency and energy services.
The program is innovatively structured, blending concessional equity and grant capital to mobilize significant amounts of commercial equity to accelerate investments in these sectors, while providing the necessary USD 4.5 million in technical assistance support to create an enabling environment.

By investing across the energy sector value chain, transport and waste sectors, the program reduces GHG emissions and increases access to alternative water resources in India through investments into wastewater treatment and desalination plants. 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.

India is conducting the world’s largest clean energy programme to achieve 175 GW of renewable capacity, to help reduce its carbon footprint by 33-35% from the 2005 levels, as part of global climate change transition commitments adopted by 195 countries in Paris in 2015. India currently has an installed renewable energy capacity of 89.63GW of which 49.59GW capacity is running.

Green Climate Fund (GCF)

The Green Climate Fund (GCF) is the world’s largest dedicated climate fund. GCF’s ruling is to promote a paradigm shift towards low emission, climate resilient development pathways in developing countries. GCF has a portfolio of over USD 8 billion (over USD 30 billion including co-financing) delivering transformative climate action in more than 100 countries. It also has a readiness support programme that builds capacity and helps countries develop long-term plans to fight climate change.

GCF is an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and serves the 2015 Paris Agreement, supporting the goal of keeping average global temperature rise well below 2 degrees Celsius.

EverSource Capital

EverSource is the fund manager of the Green Growth Equity Fund (GGEF or the Fund), established with anchor investment from India’s National Investment and Infrastructure Fund (NIIF) and Foreign, Commonwealth & Development Office (FCDO), Government of UK.

The Fund is based in Mumbai (India) and shall invest in scalable operating companies and platforms across renewable energy, energy efficiency, energy storage, e-mobility, resource conservation and associated value chains.

EverSource Capital provides global investors an opportunity to invest in the Indian green infrastructure, alongside a global industrial leader and established regional fund manager.