ADB to invest $15 million in Avaada Energy to scale up solar energy capacity
The agreement was signed by the Director of Infrastructure Finance, South Asia, Central Asia, and West Asia at ADB’s Private Sector Operations Department Shantanu Chakraborty and Chair of AEPL Vineet Mittal.ADB | New Delhi | Updated: 29-09-2020 08:25 IST | Created: 29-09-2020 08:25 IST
The Asian Development Bank (ADB) has signed an agreement to invest $15 million in INR equivalent in Avaada Energy Private Limited (AEPL) to help the company to scale up photovoltaic solar energy generation capacity in India.
This is ADB's second investment in AEPL after the first round of $50 million invested in April 2019. The latest investment will come from ADB's Ordinary Capital Resources and from Leading Asia's Private Infrastructure Fund (LEAP), each of which will invest $7.5 million. LEAP was established in 2016 by the Japan International Cooperation Agency to finance high quality and sustainable private sector infrastructure projects.
The agreement was signed by the Director of Infrastructure Finance, South Asia, Central Asia, and West Asia at ADB's Private Sector Operations Department Shantanu Chakraborty and Chair of AEPL Vineet Mittal.
"The project is part of ADB's ongoing support to India's renewable energy sector and will help the Government of India meet its targets for clean power generation," said Mr. Chakraborty. "We are pleased to enhance our commitment to AEPL and expect this investment to send positive signals to global investors to continue supporting the growth of renewable energy in India."
"ADB's investment reinforces the strong support of the international development community to India's efforts at ramping up its clean energy generation," said Mr. Mittal. "It also validates AEPL's strong track record and commitment to create a cleaner and more sustainable power generation in India."
AEPL is a leading developer of solar energy projects in India through utility-scale, rooftop, and off-grid solar facilities. The company has almost 1 gigawatt (GW) of operational capacity, and with the second round of equity investment will be well placed to expand capacity to more than 3.5 GW.
ADB has supported the development of renewable energy in India since 2007 when it financed initial wind projects under the independent power producer (IPP) model. ADB has subsequently financed solar IPPs through projects under the National Solar Mission and various state policies.
The project will contribute to the Government of India's strategy to increase the share of renewable energy generation capacity from about 20% in 2018 to 40% by 2030. It reflects ADB's commitment to providing cumulative climate finance of $80 billion from 2019 to 2030.