IDFC Private Equity backs carbon credit advisory company

IDFC Private Equity, a subsidiary of Infrastructure Development Finance Company, has invested $10 million (€6.4 million) in Emergent Ventures India, an advisory firm that delivers solutions and services for the Clean Development Mechanism programme.

Under the Kyoto Protocol the programme allows developed countries with greenhouse gas reduction commitments to invest in projects that cut carbon emissions in developing countries such as India. Carbon reductions in these countries earn them carbon credits, which are then used to meet their own emissions targets.

Established in 2004, Emergent Ventures India works on projects in renewable energy, energy efficiency, waste management, plantations and transportation. It advises companies on how they can obtain carbon credits, and manages a portfolio of 45 million carbon credits.

Emergent Ventures currently operates in India, Bangladesh, China, Malaysia, Pakistan, Sri Lanka and Thailand. The investment will be used to scale up its operations and to expand in other markets.

IDFC has been an active investor in clean energy businesses in India. Late last year, it invested R350 million in Doshion, an Indian water management company, and it led a $100 million investment in Moser Baer Photo Voltaic, a Delhi-based manufacturer of solar cells.

Luis Miranda, president and chief executive officer of IDFC Private Equity told PEO that there is a “concerted effort globally to invest in businesses that are environment-friendly,” and the “sector is seeing some interesting times going ahead.”

The investment in Emergent Ventures was made from IDFC Private Equity Fund II, a $440 million infrastructure-focused fund. IDFC has so far deployed about 80% of the fund in 13 deals, Miranda said. Of the 13 investments, five have been made in clean energy related businesses.