IFC, Tata Capital invest $31m in India's Tata Cleantech
Tata Capital and the International Finance Corporation (IFC) have invested INR2 billion ($31 million) in renewable energy-focused non-banking finance company (NBFC) Tata Cleantech Capital (TCCL).
IFC and Tata Capital established TCCL as a joint venture in 2014 and hold stakes of 19.5% and 80.5%, respectively. They made the latest investment in the same proportion, meaning the size of their holdings will remain unchanged. TCCL will use the new capital to improve its underwriting capability in order to participate in large-scale energy projects, CEO Manish CEO Manish Chourasia told Livemint.
The new investment brings TCCL's total tier-one capital, which consists of equity, to INR5.9 billion. The NBFC will provide financing to clean energy projects including wind, solar, and hydropower facilities. It will also consider additional infrastructure projects such as power transmission and water, along with education and healthcare investments.
TCCL claims to have provided financing to more than 80 renewable energy projects in India since receiving its infrastructure finance company license from the Reserve Bank of India in 2015. The company's loan book grew from INR12 billion in March 2016 to INR20 billion at the same time this year. Over the same period revenue rose from INR1 billion to INR1.58 billion, while profit grew from INR270 million to INR460 million.
In a filing last month, IFC disclosed that it was considering a subscription of up to $40 million in senior debt issued by TCCL. The development finance institution (DFI) described the proposed transaction as a separate deal from the IFC-Tata investment.
IFC is active in India's clean energy sector as both a direct investor and an LP in renewable resources-focused funds. The DFI's LP commitments include a $100 million investment in Actis Capital's fourth emerging markets energy fund, which closed earlier this year at $2.75 billion. It has also proposed investments this year in solar power companies Clean Max Enviro Energy Solutions and energy-focused NBFC L&T Infrastructure Finance.
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