MANILA, PHILIPPINES -- The Asian Development Bank (ADB) has made an equity investment of $50 million in a leading Indian renewable energy company ReNew Power Ventures Private Limited (ReNew Power), underscoring ADB's commitment to help India meet its clean energy targets.
The investment will help finance the company's growing pipeline of wind power projects at various stages of development across India, with a total capacity of 1,000 megawatts (MW).
"ADB financing will allow ReNew Power to tap into ADB's extensive network, knowledge, and experience in the field of renewable energy, especially in India," said ADB's Principal Investment Specialist Siddhartha Shah. "ADB's investment is a signal to private sector companies that India's renewables sector is ripe for further investment."
India relies on expensive imports of coal and liquefied natural gas, as its energy demand rises and domestic supplies of conventional fuels decline. Renewables' share of India's energy mix dropped from 44% in 1970 to 31% in 2011. To reduce dependence on imported fossil fuels and cut greenhouse gas emissions, the Government of India has set a goal of maintaining renewables' current share of installed capacity through to 2023.
An extra 1,000 gigawatt-hours of electricity is expected to be generated annually by ReNew Power's renewable energy projects, eliminating nearly 1 million tons of carbon dioxide emissions. More generally, increased private sector participation in Indian renewables will enhance the sector's efficiency through increased competition and a deeper pool of invested funds.
ReNew Power's majority shareholder is the private equity arm of Goldman Sachs Group Inc.ReNew Power currently owns and operates nearly 500 MW of clean energy assets across India. So far, its portfolio has been focused on wind power, with projects selected in states offering the best combination of wind resources and feed-in tariffs -- fixed payments to renewable energy producers for the electricity they generate.
Energy access, renewable energy development, and energy efficiency are priorities at ADB. In 2013, ADB invested $2.3 billion in clean energy and has pledged to continue investments of at least $2 billion per year.