British International Investment (BII), previously CDC Group, a development finance institution (DFI) and impact investor from the United Kingdom, plans to invest £500 million over the next five years in clean and sustainable economic growth, said Srini Nagarajan, Managing Director and Head of Asia, BII, in an interview.
BII will invest in critical sustainable and climate-resilient infrastructure, with a priority on renewable energy, transportation and water, sanitation and hygiene services (WASH) projects to ensure the South Asian country can build back better from the COVID-19 pandemic and beyond. Under its new strategy, it has set a target for 30 per cent of new commitments over five years to be in climate finance, meaning a total of over £3 billion for South Asia and Africa. Of this amount, over £2 billion will be towards infrastructure.
“We see a strong need in the region to decarbonise and strengthen the power sector through renewable energy, and we will aim to invest up to £500 million over the next five years, to support investments within this focus, along with investments in the water and sanitation sectors,” he said.
Underlining the importance of net-zero carbon by mid-century in a coal-dependent economy like India, the DFI said that coal mining and energy generation sectors will be most impacted during the country’s transition to green.
In 2021, BII pledged to invest up to $1 billion in climate finance in India over the next five years, to support the country’s journey towards becoming a carbon-free economy. In 2018, BII founded Ayana Renewable Power, a clean energy developer in India, with an initial capital commitment of $100 million and to develop and run utility-scale solar and wind generation projects in India. Since then, the company has increased its commitment to $230 million, with the most recent investment made in 2021. The DFI has also mobilised $500 million from a third party, said Nagarajan.
In new plans, the DFI aims at deploying support across its full capital toolkit, including working with trusted partners among sponsor companies and project developers for potential equity investments, fund managers who specialise in infrastructure or more-innovative climate finance, and multilateral development banks and commercial lenders for large project-finance transactions.