IFC to support Indian hydro with AD Hydro Power
The World Bank’s private investment arm, International Finance Corporation (IFC) has announced it will extend $15 million of equity and $67 million of debt to AD Hydro Power Ltd., a 192-MW project in Himachal Pradesh under joint development by Bhilwara Energy (a subsidiary of LNJ Bhilwara Group) and Norway-based SN Power.
In exchange, IFC will receive a 12% stake in AD Hydro, and has reportedly agreed to invest a further $10 million in equity going forward.
The move marks one of the first hydro power plants to be financed on a merchant basis in South Asia, and is part of a broad expansion of hydro electric power generation capability in North India and Nepal. The primary aim is to address peak electricity shortages in the sub-region.
A strategic cornerstone for IFC is to increase its support for least-cost renewable energy. Run-of-the-river projects are considered low impact from an environmental standpoint, with additional benefits such as greenhouse gas emission reduction and increased employment in the construction and operation of the ensuing plant. These echo Indian government priorities.
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