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The International Finance Corporation (IFC) on Wednesday announced a commitment of $20 million in Nereus India Alternative Energy Fund, a new private equity fund domiciled in Mauritius.
Billed as India’s first renewable dedicated fund, the offshore vehicle will invest in companies engaged in development, construction and operation of renewable and clean energy power generation assets in India.
Nereus India Alternative Energy Fund’s anticipated portfolio will comprise seven to 10 investments of $15-35 million each in equity and equity-linked securities of companies focusing on renewable energy assets.
The target size of the fund is $250 million and final closure is expected by the end of the next calendar year, said Jonathan Winer, Founder and Managing Director, Nereus Capital.
He said Nereus India Alternative Energy Fund would invest in all sub-sectors of alternative energy including wind, solar, hydro and bio-mass.
Through this investment, IFC expects to reap the gains of multiplier effect by reaching out to 10-12 companies, said Vikram Raju, regional lead in Asia for IFC’s private equity and investment funds programme.
Asked about return expectations on the proposed investment, Raju said IFC was looking at strong risk-adjusted financial returns besides significant development impact in terms of job creation.
IFC’s private equity investments have returned 22 per cent (net) internal rate of return since 2000. As for India, no complete exits have happened in most of the investments, Raju said.
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