1111New Delhi: British International Investment (BII), the development finance institution of the UK government, is planning to invest more than $250 million in the current year (2024) in India, a market it considers unique in emerging Asia, Managing Director and Head of Asia, Srini Nagarajan said.
The impact investor is working on a larger plan to invest $1 billion into climate-related projects between 2022 and 2026 in India to support the country’s journey to become a carbon-free economy. Its focus areas are clear — mobilization, new climate technologies, and decarbonisation platforms.
“We will continue to invest in areas where we can make the largest impact and deliver inclusive growth, particularly when it comes to jobs for women and climate finance,” Nagarajan told ETEnergyworld in an exclusive interview.
In order to create development impact, BII is identifying areas where private investors are still nervous of entering. One such important area the institution is working on currently and where it hopes to get more results in 2024 is the efforts on mobilisation.
“We plan to bring in third party commercial capital especially investors who are relatively new to the country. For the SE Asia region, we have a £500 million commitment to boost climate finance in our current strategy period 2022 to 2026,” Nagarajan said.
Within the Energy space, BII has three key priorities. One, projects where it can demonstrate a very strong mobilisation theme. Two, getting into newer technologies that are not yet tested and proven, and where it will use its catalytic capital. Thirdly, it is starting to conceptualize how to create more decarbonisation platforms, which require long-term patient capital.
“We are beginning to see a number of climate tech funds which will also provide us an opportunity to take smaller co-investment stakes and possibly direct investments over a period of time. Climate technology, as a segment of VC investing, requires more patient capital, likely to be capital intensive and may require some concessional capital as well. I expect BII to play a role there,” Nagarajan said.
He said the regulatory environment in the energy space in most countries in the South Asia region is still evolving, and in this respect, India has evolved well. For example, the way India initially commenced its reverse bidding auctions for utility scale renewable energy projects and the speed and ease with which the country brought about its solar parks initiative with central PPAs attracted international investors and reposed confidence in them.
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