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IFC to inject $100m into Indian solar financier

The World Bank affiliate is considering another investment in the sector shortly after the country confirmed its 40GW solar target by 2022.

The International Finance Corporation has proposed an investment of up to $100 million in L&T Infrastructure Finance through the purchase of non-convertible debentures issued by the Indian company.

The proposed deal aims to support the Indian infrastructure financier as it strives to provide debt to solar energy projects across India, according to a disclosure on the IFC’s website. L&T IF’s “green bond”, to which the IFC will subscribe, is said to be secured, fixed, rated and listed.

L&F IF is a wholly owned subsidiary of Larsen and Toubro’s finance holding arm. It has been acting as a non-banking financier for domestic infrastructure projects across a variety of sectors since 2006.

The IFC said investing in L&F IF would be consistent with the World Bank’s Indian Country Partnership Strategy, the stated objectives of which include improving of access to electricity and reducing greenhouse gas emissions. The institution has been supporting India’s renewables sector since 2009.

The proposed investment in L&T IF follows the announcement of another potential $15 million liquidity injection into an Indian renewable energy service company through compulsorily convertible debentures two weeks ago. The proposed equity investment in Clean Max Enviro Energy Solutions is expected to see the company, which provides solar solutions for commercial and industrial customers in India, commission more than 250MW of solar projects over the next three years.

Early this year, the IFC invested $125 million for an equity stake in Hero Future Energies to help the Indian renewables developer set up 1GW of greenfield solar and wind projects across the country in 2017.

India’s Cabinet Committee of Economic Affairs confirmed the country’s latest solar target last week, paving the way to develop 40GW of large-scale solar projects by 2022.

Solar Energy Corporation of India, run by the country’s Ministry of New and Renewable Energy, will develop at least 50 solar parks with a capacity of 500MW or above between 2019-2020, in collaboration with state governments across the country. These projects will be backed by 81 billion rupees ($1.2 billion; €1.15 billion) in central government financing.