Green Climate Fund Approves FMO’s $137 Million Investment in India

EverSource Capital will execute the approved GCF commitment

April 5, 2021


The Green Climate Fund (GCF) has approved Dutch development bank FMO’s proposal to accelerate private and public sector investment in India’s green infrastructure projects. Through the Green Growth Equity Fund (GGEF), the Dutch development bank will invest $137 million in the energy value chain, water, waste, and transport sectors that promote low carbon and climate-resilient initiatives in line with India’s climate objectives and Sustainable Development Goals.

GGEF is managed by EverSource Capital which is also the executing entity of the approved GCF commitment.

India faces significant climate change challenges mainly due to greenhouse gas (GHG) emission-induced warming. The country faces increasingly extreme weather events and natural hazards, putting pressure on critical natural resources such as water while damaging infrastructure and threatening livelihoods. There is a need for far-reaching mitigation, and adaptation measures since GHG emissions in India are the third-largest in the world, contributing to 7% of global emissions and temperature rise.

The total investment needed to ensure low-carbon and climate-resilient pathways for India is estimated at $2.5 trillion over 2016-2030. An upcoming study by Climate Policy Initiative finds that India is mobilizing less than 25% of the investment needed to reach this target.

Linda Broekhuizen, CEO ad interim at FMO: “We are excited to announce our second GCF project, with such a substantial contribution to sustainable development goals, across economic, environmental, and social dimensions. Apart from contributing to India’s climate goals, GGEF contributes to job creation and increased economic activity. This stimulus is particularly timely now, in a covid19 pandemic environment, which is threatening India with the economic slowdown, job losses, and negative implications for businesses.”

EverSource Capital-managed GGEF targets raising equity capital to $940 million for India’s green infrastructure sectors such as renewable energy, transport, resource efficiency, and energy services. The program provides the necessary $4.5 million in technical assistance support to create an enabling environment.

Dhanpal Jhaveri, CEO, EverSource Capital, said: “We are delighted to receive GCF Board approval for an investment in GGEF. This is the largest single country amount approved by GCF ever for a private sector equity fund focused on climate mitigation. This investment commitment strengthens our resolve and ability to work towards supporting India’s climate objectives and Sustainable Development Goals along with creating impact and value in India’s clean energy ecosystem.”

By investing across the energy sector value chain, transport, and waste sectors, the program reduces GHG emissions and increases access to alternative water resources in India through wastewater treatment and desalination plants. The total emission reduction expected from the is the equivalent of 166 million tons of CO2 while treating and generating an additional 5,700 million cubic meters of water from alternative resources for use by households, farmers, and businesses.

Tony Clamp, Director, Green Climate Fund, said: “GCF is delighted to be partnering with FMO and other international investors to provide critical risk capital for this key strategic climate fund in India. The GGEF will make much-needed investments across the energy, emobility, water, and waste sectors to help drive India’s climate ambitions.”

GGEF was launched in April 2018 after Lightsource BP, a global renewable energy development firm, and Everstone Group teamed up to create a major fund management platform called EverSource Capital for the development of green energy infrastructure in India. At launch, the GGEF had a fundraising target of £500 million (~$710.6 million).

Mercom had also reported that EverSource Capital and NIIF, in partnership with Ayana Renewable Power, planned to invest $330 million (₹24.45 billion) in the Indian renewable sector.