ADB invests $50m in India’s Welspun Renewables

According to project documents, the ADB proposed taking an interest of up to 25% in Welspun Renewables, subject to a total investment cap of $50 million. A Foreign Investment Promotion Board (FIPB) filing from earlier this year approved the acquisition of a 13.3% stake for INR3.1 billion (then $50 million). It also permitted Welspun Renewables to issue INR2.2 billion in compulsorily convertible debentures to German development finance institution DEG.

Welspun Renewables had 309 megawatts of operational projects as of November 2013, comprising 289 MW of solar capacity and 20 MW of wind capacity. It had a further 211 MW of projects under construction - 119 MW solar and 92 MW wind - and a pipeline of 1.2 gigawatts. The ADB and DEG funding is intended to help the company reach 600 MW in operational capacity by March 2016.

India remains in chronic need of power generation capacity. The government's 11th Five-Year Plan for 2007-2012 targeted additional capacity of 79 GW but only 55 GW was achieved. The goal for the current five-year plan is 88 GW, of which 30 GW is expected to come from renewables. The government wants the renewable share of overall capacity to remain at 31% until 2023. By this point, the private sector share of installed renewable capacity is expected to reach 50%, up from 33% in 2011.

Under the ADB's energy policy, financial support for clean energy investments increased to $2 billion per year in 2013, up from the previous target of $1 billion.

Last year, the organization provided $30 million in financing to NSL Renewable Power Private that will go towards the construction of two hydro-power and wind energy projects. This was the ADB's first equity investment in a private sector renewable power generation company in India.

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• Topics
• Expansion
• Cleantech
• South Asia
• Cleantech
• energy
• India
• Asian Development Bank
• Growth capital