IFC considers $100m investment in Indian solar

The investment under consideration would see IFC subscribe to non-convertible debentures to be issued by LTIF, according to a disclosure. LTIF will use the resulting long-term financing to provide credit lines for developers of Indian solar energy assets.

IFC expects its support for the 7-10 year bonds to encourage LTIF to support renewable energy in India as a long-term strategic focus. Currently 90% of LTIF’s funding comes from sources with a tenor of seven years or less. The investment will also add LTIF to IFC’s knowledge sharing network, allowing it to benefit from the development finance institution’s (DFI) global expertise in renewable energy lending and improve its project appraisal and risk assessment capabilities.

LTIF is a subsidiary of L&T Finance Holdings, the financial services arm of Indian engineering and construction conglomerate Larson & Toubro. The company is registered as both an infrastructure finance company and a public finance institution with the Reserve Bank of India and provides a range of financing solutions for infrastructure projects including power, telecommunications, roads and gas.

IFC made a similar deal in 2015, committing $35 million to PTC India Financial Services to provide long-term financing for local wind, solar and other clean energy initiatives. The DFI has also made more direct investments in India’s clean energy sector. Recent commitments include the purchase of an undisclosed stake in renewable energy platform Hero Future Energies for $125 million.

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• Topics
• South Asia
• Infrastructure
• Infrastructure
• Cleantech
• Expansion
• India
• IFC
• energy
• Structured finance
• Growth capital