India’s NIIF makes first investment in green fund

EverSource Capital is appointed manager of the Green Growth Equity Fund, which will raise further capital from UK-based institutional investors to reach a £500 million target.

India’s National Investment and Infrastructure Fund has appointed EverSource Capital – a joint venture between Everstone Group and Lightsource BP – as the manager of Green Growth Equity Fund, the first investment from the NIIF’s fund-of-funds strategy.

The Indian and UK governments proposed the launch of the £500 million ($701 million; €571 million) GGEF as a sub-fund of the NIIF in November 2016. The green fund was officially launched last week with the GP appointment and two cornerstone LP commitments of £120 million each from the Indian government-sponsored NIIF and the UK government.

Winning the mandate following an international selection process, the Indian multi-asset investment firm Everstone and UK-based renewables developer Lightsource BP will work together via their 50:50 JV to manage the India-focused green infrastructure fund, as well as to continue fundraising from institutional investors based in the UK.

“We are looking at investors spanning sovereign wealth and pension funds, endowments, climate-focused funds, funds based in the City of London and also other UK-based funds,” Dhanpal Jhaveri, managing partner of Everstone Private Equity, told Infrastructure Investor.

He declined to comment on the fund’s expected returns, but stressed there is “a robust pipeline of opportunities ready to invest capital in”.

“Broadly, a third of the fund would be invested in the regulated space, which includes grid-connected renewable energy assets such as wind, solar, mini-hydro and biomass, while another one-third would go into off-grid strategies. The remaining one-third would be invested in other clean-tech strategies around water and electric mobility etc.,” Jhaveri added.

“By using a pooled investment vehicle and a public-private partnership approach, global investors will get the opportunity to be part of this investment platform,” said Sameer Sain, chief executive of Everstone Group.

Through this investment in the Green Growth Equity Fund, the NIIF is looking to demonstrate the role its fund-of-funds strategy can play in India’s infrastructure market by anchoring and investing with fund managers with good track records, it said in a statement. The strategy will complement the master fund, which will focus on investing in large-scale operating platforms for core infrastructure sectors, it added.

Launched in July 2015 to attract private capital, the NIIF has a target of $6 billion and is backed by the Indian government which is sponsoring half of the fund’s capital. Last October, the Abu Dhabi Investment Authority committed $1 billion to the NIIF’s master fund, becoming the first third-party institutional investor to do so.