According to reports, global development finance institution Proparco is currently in discussions to invest $10 million (about Rs 54 crore) in RenewGen Enviro Ventures India, a Bangalore-based renewable energy firm.
The investment, which will be in the form of debt, follows the $9 million debt-and-equity investment made by International Finance Corp, the private investment arm of the World Bank, last May.
Additionally, RenewGen has also raised $3 million from global infrastructure development company Infra-Co Asia Development.
“We are in discussions with them (RenewGen), and have looked at an investment possibly in the form of debt,” said Emmanuelle Riedel Drouin, representative, South-Asia, for Proparco.
Development finance institutions, amongst the most active risk capital investors in India, are increasingly allocating larger amounts of capital for debt-based funding as they recast their investment strategy in the country.
Proparco has also invested in Karnataka-based energy company Bhoruka Power, and has provided a line of credit to financial institutions, including ICICI Bank and Srei Infrastructure Finance, to provide loans to renewable energy companies.
The renewable energy venture, incorporated in 2008, also counts TT Jagannathan chairman of the Chennai-based diversified conglomerate TTK Group, as one of its early backers.
RenewGen is currently undertaking a 10 mega-watt waste-to-energy project in Sri Lanka, the project cost for which is expected to be around $30 million. The project is one of the largest foreign direct investments in the sector for the country.
RenewGen Enviro Ventures India received a 25-year concession to build, own and operate the project in the western province of Sri Lanka, which can process up to 580 MT per day of municipal solid waste and will generate electricity that will be sold to the grid.
The company is also in the final bidding stages in a couple of projects based in India, according to Vishnu Vasanth, the promoter of RenewGen.
“We are looking at waste-to-energy as a part of the overall renewable play, but have no plans of restricting ourselves,” he said.
Indian companies catering to the alternative energy space are emerging as attractive investment options for global private equity funds over the last 24 months.
In September 2011, Goldman Sachs invested close to Rs 1,000 crore in Re-New Wind Power, which plans to develop 1,000 mega-watts of renewable energy projects by 2015.
Separately, Morgan Stanley Infrastructure Partners, an arm of the US investment bank, picked up a stake in Continuum Energy recently for Rs 1,200 crore.