Northern Lights, Nereus Capital bolster India clean energy
Nereus Capital has received $100 million in commitments from Northern Lights Capital Group and the US Agency for International Development (USAID) for its $250 million India Alternative Energy Fund (IAEF).
This is the first time USAID has partnered with a private equity fund to facilitate targeted investment. The agency will provide a 40% credit guarantee for the $100 million commitment managed by Northern Lights.
It is anticipated that the investment will create hundreds of additional megawatts of sustainable energy capacity and help advance India's burgeoning clean energy industry.
"Challenges for traditional thermal power generation and persistent power deficits dictate that an increasing proportion of new power generation capacity in India will be derived from alternative energy," said Jonathan Winer, managing director at Nereus. "Corresponding to this expanding market opportunity, the growth in our assets under management from this transaction allows Nereus to continue to finance leading independent power producers in India."
The Indian government has set a target of 30,000 megawatts of renewable energy generation capacity in the next five years to meet the country's demand.
IAEF seeks to address this growing demand by investing in independent power producers that develop alternative energy projects in India. The fund's investment focus includes wind power, hydropower, solar power, and large-scale energy efficiency projects.
Nereus is looking to build a portfolio of 7-10 investments of $15-35 million each. Last year, the fund secured $20 million commitment from International Finance Corporation (IFC), the investment arm of World Bank.
Nereus is not the only investor keen on India's renewables space. Goldman Sachs has set a $40 billion target for financing and investing in clean technology companies over the next decade and earlier this month invested another $135 million in Indian energy producer ReNew Wind Power, adding to its initial investment of around $250 million made in 2011.
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