The International Finance Corp., the World Bank’s private lending arm, will target clean energy for most of its approximately $700 million in infrastructure funding in India in the fiscal year ending June 2016.
Renewable energy is more than a third of IFC’s infrastructure portfolio in India and is set to grow, Sujoy Bose, IFC’s global head for infrastructure and natural resources, said in an interview.
“In FY15, IFC has mobilized over $330 million including loans and equity from other investors for renewable energy projects in India,” Bose said.
The global lending agency invested $600 million to $700 million in Indian infrastructure last fiscal year, Bose said.
“In the power sector in India, renewables is going to be the bulk of what IFC does,” he said.
The agency has an investment portfolio of about $2.2 billion in India, with 70 percent in debt and 30 percent in equity. As part of a shift in strategy, IFC is looking to focus more on equity, though the debt-equity ratio won’t shift.
“The focus on equity going forward will be more meaningful investments rather than simply changing the ratio between loans and equity,” Bose said.
On Aug. 4, IFC issued the first green “Masala” bond, raising 3.15 billion rupees ($49 million) for private investments addressing climate change in India.
IFC made its first renewable energy investment in India in 2007 with $10 million. As of fiscal year 2015, the agency’s total clean energy investment portfolio in the country is more than $700 million.
India has about 37 gigawatts of clean energy capacity at the moment, according to government data. The government aims for 175 gigawatt by 2022 at an estimated investment of $200 billion.