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Indian firm mulls $1bn Indo-Nordic cleantech fund

The Indian firm hopes to attract Nordic capital for a platform that will pair Nordic cleantech expertise with Indian businesses and projects.

India’s Infrastructure Leasing & Financial Services (IL&FS) is currently touring Finland, Sweden and Norway seeking partners for both a platform and a $1 billion fund that will bring Nordic cleantech expertise to Indian businesses and projects.

The $1 billion Environmental Sustainable Infrastructure Fund (ESIF) will be managed by IL&FS’s private equity division. It hopes to attract capital from Nordic pension and sovereign wealth funds and state institutions, as well as capital from IL&FS and other third parties. Its objective is to connect small and medium businesses in the Nordic countries with cutting-edge technological capabilities with their Indian counterparts and cleantech projects across the country.

“The proposed fund will enable Nordic capital to support Nordic business interests in developing efficient and meaningful partnerships with their Indian counterparts and bid successfully for Indian projects [providing] sustainable infrastructure services,” said Pradeep Puri, chief executive officer of MET Project at IL&FS on Monday, a day ahead of President Pranab Mukherjee's three-day state visit to Finland.

The fund is complementary but distinct from the Indo-Nordic Sustainable Innovation Platform IL&FS is also launching. The latter will be an exchange hub between Nordic companies and Indian institutions working on energy, water, waste, climate change and related environment sectors – it will not provide funding. The ESIF may, however, choose to fund companies and projects identified by the Indo-Nordic Sustainable Innovation Platform.

The project proponents will be public authorities, industry and investors in India.

Paritosh Gupta, chief executive of IL&FS Infrastructure Development Corporation, said the Nordic region has a strong tradition of innovation in cleantech and sustainability and believes “there is an untapped and huge opportunity for such companies to partner with Indian businesses”. 

Finland's small and medium sized cleantech companies are keen to venture into India and are looking for suitable opportunities with the help of IL&FS, said Mika Finska, senior advisor at Cleantech Finland. He said the Finnish government has a 2015 plan to position the country globally as a top cleantech expert with the help of 80 Finnish companies.

IL&FS has partnered with several state utilities for developing generation, transmission and distribution projects on a public-private partnership basis. The company is currently involved in the development of over 7,100 megawatts (MW) of thermal and hydro projects across the country.

IL&FS Energy Development Company, a subsidiary of IL&FS, owns and operates wind farms with an operational capacity of 549.6MW as at 31 March 2014. The wind farms are spread across the states of Gujarat, Karnataka, Rajasthan, Madhya Pradesh, Tamil Nadu, and Andhra Pradesh in India.