UK-Denmark pact North Star to support clean energy transition in India

The UK's British International Investment and a Danish fund manager launched a 300-million-dollar renewable energy platform in India to support the country's clean energy transition and address funding gaps.

The UK's development finance institution and a Danish global fund manager on Tuesday launched a project to support India's clean energy transition.

British International Investment (BII) joined hands with Copenhagen Infrastructure Partners (CIP) for the 300-million-dollar renewable energy platform, North Star, that will invest across solar, wind and hybrid as well as storage projects.

BII and CIP, through their Growth Markets Fund II (GMF II), will each commit up to USD 150 million for the platform designed to address the funding gap required to build and scale renewable projects in India and crowd in additional private capital.

This marks the first investment made through British Climate Partners (BCP), a 1.1 billion pounds climate finance initiative launched by BII last month as part of its new five-year strategy.

''British Climate Partners is about mobilising institutional capital at scale to accelerate the energy transition in developing Asian economies, including India, where the need and opportunity are greatest,'' said Rohit Anand, BII's MD and Head of Asia Infrastructure.

''Building on BII's extensive experience in both energy investing and India, the launch of North Star reflects the country's strong renewable growth, supportive policy momentum, and the role catalytic capital can play in delivering clean power at pace,'' he said.

North Star is expected to generate more than 4 million MWh of clean energy annually and avoid about 4 million tonnes of carbon emissions each year.

Peter Jannik Sjontoft, Partner in CIP's Growth Markets Funds, said: ''India is one of the most important renewable energy markets globally.

''Partnering with British International Investment allows us to build on our existing India investments and combine deep local insight with global investment expertise to accelerate project delivery and support the build-out of renewable energy infrastructure at scale.''.

BII's British Climate Partners (BCP) is designed to mobilise large-scale institutional capital into climate solutions across fast-growing and coal-dependent economies in Asia, including India, as well as the Philippines, Indonesia, Vietnam and other South-East Asian countries.

India has set a target of 500GW of installed renewable energy capacity by 2030 and net-zero by 2070. However, there is a significant climate financing gap of around USD 160 billion a year until 2030.

BII said it was this combination of ''scale, ambition and unmet financing needs'' that led to India being selected as the first investment market under its BCP initiative.

According to BII, although renewable energy tenders have expanded rapidly in India, many developers lack the development capacity and capital required to bring projects through to construction and operation. Therefore, North Star is specifically designed to address these constraints and accelerate projects to scale, while mobilising more private investment.

BII claims a proven track record in investing to support India's green transition. In 2018, it invested 100 million dollars to launch Ayana, a renewable generation platform which attracted private capital before being sold last year for an enterprise value of USD 2.3 billion.

As the UK's development finance institution and impact investor, BII's remit is to invest in businesses in developing countries to ''improve people's lives and help protect the planet''.

Copenhagen Infrastructure Partners, founded in 2012, is a global fund manager and investor in energy infrastructure.