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Dutch Development Bank invested $137 million in India’s EverSource Capital’s GGEF

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Dutch development bank FMO to invest $137 mnOn April 2, 2021, Dutch entrepreneurial development bank (FMO) invested $137 million (~ Rs 1000 crore) in India’s Green Growth Equity Fund (GGEF), managed by EverSource Capital, to invest in India’ green energy space such as clean energy, transportation, resource efficiency and energy services.

  • This fund-raising was approved by South Korea-based Green Climate Fund’s (GCF) board, the world’s largest dedicated climate fund
  • This is the largest single country amount approved by GCF ever for a private sector equity fund focused on climate mitigation.
  • Earlier this BP Plc, a British multinational oil and gas company announced a $70 million investment in GGEF.

Objective:EverSource Capital’s GGEF aims to reduce greenhouse gas (GHG) emissions and increase access to India’s alternative water resources.

Note – Green Climate Fund, having an $8 billion portfolio, is the world’s largest dedicated climate fund.

Background:

  • India’s GHG emission was the third-largest in the world, which is contributing to 7% of global emissions and temperature rise.
  • Hence India needs a total of $2.5 trillion over 2016-2030 to ensure low-carbon and climate-resilient pathways.
  • A study by Climate Policy Initiative says that India is mobilising less than 25% of the investment needed to reach its target.

About Green Growth Equity Fund (GGEF):

  • GGEF is raising the capital to invest in the country’s green infrastructure sectors such as renewable energy, transport, resource efficiency and energy services.
  • The fund will also invest in value chain, water, waste and transport sectors that promote low carbon and climate-resilient initiatives.

India’s Stats:

India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, to help reduce its carbon footprint by 33-35% from the 2005 levels, as part of global climate change transition commitments adopted by 195 countries in Paris in 2015.

Recent Related News:

On March 16, 2021, Deutsche Bank and Continuum Energy Levanter Pte Ltd, a subsidiary of Continuum Green Energy (Continuum) executed the world’s 1st green hedging transaction based on a specially designed green hedge framework with a second party opinion.

About EverSource Capital

  • It is a joint venture between private equity firm Everstone Capital and global solar project developer Lightsource BP.
  • It is the fund manager of GGEF and it aims to raise a total of $940 million and has the National Investments and Infrastructure Fund (NIIF) (£120 million) of India and the UK government’s Department for International Development (£120 million) as anchor investors.
  •  It provides global investors with an opportunity to invest in the Indian green infrastructure, alongside a global industrial leader and established regional fund manager.

Establishment – 2018
Headquarters – Mumbai, Maharashtra
Chief Executive Officer –  DhanpalJhaveri

About Dutch development bank (FMO):

Establishment –  1970
Headquarters – Hague, Netherlands
CEO (interim) -Linda Broekhuizen