GEF invests $46m in Indian renewable power

Global Environment Fund (GEF), a US-headquartered environment- and cleantech-focused investment firm, has invested $46.3 million in Hyderabad-based Greenko, an independent power producer focused on the generation of renewable energy, for a stake of 29.99 percent.

Following the investment, GEF has two seats on the board of Greenko’s Mauritian subsidiary, the firm said.

Greenko, which is listed on the AIM, is engaged in renewable energy generation through the development, acquisition, construction and operation of hydro and biomass-fired plants. The company currently has 101.5 megawatts of contracted capacity of clean energy assets including six biomass and three hydro plants and 154 megawatts of concessions under development.

The investment will be used to fund the company’s growth as it looks to develop a portfolio of biomass, hydroelectric and wind assets in India and to increase the installed capacity by acquiring projects and winning concessions to develop new greenfield assets.

Headquartered in Chevy Chase, Maryland, GEF invests in clean technology, energy efficiency and timberland in emerging markets.

The investment was made from the Global Environment Emerging Markets Fund (GEEMF) III which invests in the sectors such as clean and renewable energy, natural resources and environmental services, George McPherson, a managing director at GEF, told sister publication PEI Asia.

GEEMF III closed on $328 million in the first quarter of 2008. The fund has made eight investments thus far and has deployed about $250 million, McPherson added.

GEF also manages the South Asia Clean Energy Fund (SACEF), which is targeting commitments of $200 million and has raised $100 million so far. The fund will see a final close in mid-2010, according to McPherson. SACEF is focused on investments in India, Sri Lanka, Bangladesh and Nepal. The fund will invest in the same sectors as GEEMF III, but in smaller, less mature companies, he said.

SACEF has several investments in advanced stages of due diligence and will likely complete its first investment by the second quarter of 2010, he remarked. The fund is managed out of Mumbai.

The Manila-headquartered Asian Development Bank is one of the promoters of the fund and has committed $20 million to it. As of August 2009, the International Finance Corporation was mulling a commitment of $20 million the fund.

Established in 1990, GEF manages $1 billion in private equity investments.