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Indian-Sri Lankan tie-up to launch $100m green fund

The pair’s first round of capital raising targets ultra-high-net-worth individuals and strategic investors, with expected returns in the high-single digits.

Indian conglomerate Aditya Birla Group and Sri Lanka-based Lotus Renewables are preparing to launch the Global Clean Energy Fund, a vehicle targeting renewables projects in Asia-Pacific. 

Infrastructure Investor understands that the two partners are looking to raise $100 million for the fund by the end of this year, with a $30 million first close expected within a couple of months. 

This initial round of fundraising targets ultra-high-net-worth individuals and strategic investors, K Gowri Shankar, a director at Lotus, told Infrastructure Investor. The vehicle is being marketed globally.   

Last week, Sankar was reported as saying that Lotus will seed the fund with a $5 million commitment. The two partners are targeting returns of over eight percent for the vehicle. 

The fund, to be managed by Aditya Birla Sun Life Asset Management Company, will seek to provide debt and equity financing to small- and medium-sized clean energy projects across South Asia, Southeast Asia and Australia, according to the local press. 

It will look to invest across the small hydro, solar, wind, biomass, geothermal, energy storage and smart grid sectors, in schemes that are at the pre-construction stage. The fund’s mandate also allows it to back selected stressed assets. The pair will seek strategic partners in the markets they are looking at to carry out due-diligence before assessing investments. 

Aditya Birla is a $41 billion corporation with business interests spanning cement, telecoms, wind power generation and infrastructure financing. In 2014, the Indian company teamed up with Australian fund manager Hastings to start an India-focused infrastructure fund providing refinancing options to operating infrastructure projects. 

Lotus operates renewable energy projects across India, Sri Lanka, Singapore and Australia.