The CDC Group, Britain’s official development finance institution and impact investor, has invested USD 70 million into the Green Growth Equity Fund (GGEF), the country’s first dedicated climate change fund. The fund is managed by EverSource Capital, a joint venture between the private equity fund Everstone Group and Lightsource BP, British Petroleum’s renewable energy platform.
The GGEF already has strong climate credentials and within its portfolio has many investments such as Radiance, a renewable energy solutions for commercial and industrial customers; the e-mobility platform Greencell Mobility; the utility-scale renewable energy platform Ayana; integrated waste management platform EverEnviro; and wastewater management platform Kathari, the CDC Group said in a statement on Friday.
With the CDC investment, the green fund will finance the development of 6-8 green infrastructure companies here. The GGEF is different from many funds as it follows a platform model, which mean that it sets up a firm from scratch in an interested sector and then grows the platform by making acquisitions.
By consolidating lots of smaller companies with similar business models under one roof, the platform can achieve both operational efficiencies and scale, which is key to improving profitability and building size to attract a buyer. The GGEF, as a pioneer in the green infrastructure space in the country, will hopefully play a catalytic effect by proving that investors can earn returns while directly contributing to climate objectives.
“This investment in GGEF will consolidate our role in India as a staunch supporter of the country’s low carbon future,” said Srini Nagarajan, the managing director and head of Asia at CDC Group. Dhanpal Jhaveri, chief executive of EverSource Capital, and vice-chairman of the Everstone Group, said, his group is committed to bringing positive climate impact by catalyzing capital for and investing in high growth platforms and businesses.
Last month, CDC announced an ambition to invest up to USD 1 billion in climate funding to India over the next five years ending FY’26. The commitment will fund climate mitigating projects and businesses here and enhance national efforts to align with the Paris agreement. Over the past four years, CDC has invested over USD 1 billion in climate finance across Africa and South Asia. CDC already has a USD 2 billion portfolio in the country.