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International Finance Corp, the private sector investment arm of the World Bank, could invest about Rs 100 crore in renewable energy company Clean Max Enviro Energy Solutions, one of the largest solar solutions providers in India.
According to a disclosure made on its website, IFC, one of the largest private sector investors in the country, said proceeds from the round is expected to be used by the Mumbai-based company to commission more than 250 MW of solar projects over the next three years, with the funding primarily being used to fund the construction of the proposed green field solar projects.
The quasi-equity investment could see IFC invest up to $15 million in compulsorily convertible debentures, according to the disclosure. Clean Max is seen as India's largest provider of on-site solar power.
The Washington DC-headquartered investor, which traditionally invests from its balance sheet, has emerged as one of the most sought after investors in the country, at a time when growth capital inflows have slowed noticeably from the year-ago period.
The World Bank arm, which manages private equity and venture capital assets of about $1 billion globally, has primarily focused on four investment segments in which it takes direct equity positions - consumer internet, healthcare, education and clean-tech.
Founded in 2011 by IIM Ahmedabad alum and former McKinsey senior executive Kuldeep Jain, Clean Max, which has over 90 employees, has has installed about 55 MW across onsite and rooftop, as well as offsite and solar farms in 10 states across the country, for about 40 clients till date.
While the deal is yet to formally close, this could mark the second major transaction in the broader renewable energy sector in India, following Japan's JERA Co's investment in ReNew Power, for a reported $200 million, which was announced on Tuesday.
The developments come at a time when the Government has stated in its Union Budget for financial 2017-18 that the second phase of solar power development will be taken up with an aim of generating 20,000 MW.
In January, Piyush Goyal, India's minister of state with independent charge for power, coal, new and renewable energy and mines, was reported to have said that the country is committed to meeting its renewable energy goals.
The government has also reiterated its goal of scaling up its solar power capacity to 100 GW by 2022. It is targeting 60 GW from wind energy and plans to bring in hydro power, from which it generates 40 GW, into the category of renewable energy. By 2022, the country plans to generate around 175 GW from clean and renewable sources.
Combined with 1.1 GW of expected rooftop solar capacity, India should add a total of 8.8 GW in 2017, ranking it amongst the top three global markets after China and the USA, according to a report published by renewable energy-focused consultancy Bridge to India in January.
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