Tata Capital Ltd, a Tata Sons subsidiary, has set up a joint venture company with International Finance Corporation (IFC) to explore business opportunities in the climate change space. The company, Tata Cleantech Capital Ltd (TCCL), would provide funding and advisory services to small and mid-sized enterprises developing renewable energy projects in India.
“The company has been incorporated with an initial capital of $20 million, in which 80 per cent stake is held by Tata Capital,” said Praveen P Kadle, Managing Director and Chief Executive Officer, Tata Capital. IFC, a member of the World Bank Group, would hold the remaining 20 per cent stake.
Through TCCL, Tata Capital plans to finance around 200 renewable energy and energy-efficiency projects over the next five years. “Based on the current market opportunities, we estimate $750-million business over the next four-five years,” Kadle said.
Tata Capital and IFC are hopeful of expanding the capital base of the Mumbai-headquartered TCCL to $120 million by 2016. The two partners indicated a third international partner would soon be roped into TCCL. Tata capital would, however, continue to hold 80 per cent in the venture.
“By helping establish this green finance company, we would reach small and mid-sized companies that are committed to promoting clean technology,” said IFC executive vice-president and chief executive, Lars H Thunell.
Apart from energy efficiency and renewable power generation projects for small and medium enterprises, the joint venture would also focus on water management initiatives. Thunell said the company would soon start looking at sustainable agriculture and smart-grid projects, besides clean transportation and pollution control. TCCL would utilise Tata Capital's network and huge corporate customer base.
“IFC's experience and expertise in offering lending and advisory services in clean tech sectors would be an added asset to the new company,” Kadle said.
