The Asian Development Bank (ADB) announced that it has signed an agreement to invest $50m in Avaada Energy (AEPL) to help the company rapidly scale up photovoltaic solar energy generation capacity in India.
ADB said that the proposed investment is expected to be arranged equally by ADB’s Ordinary Capital Resources and Leading Asia’s Private Sector Infrastructure Fund (LEAP), which is a funding arrangement provided by Japan International Cooperation Agency, administered by ADB.
AEPL chair Vineet Mittal and ADB principal investment specialist Mayank Choudhary have signed the agreement for the proposed investment.
Choudhary said: “Supporting renewable energy capacity enhancement by way of debt and equity is a key focus area of ADB’s private sector strategy. We are pleased to invest in Avaada, which will enable it to expand its renewable energy capacity and send positive signals to global investors to continue supporting the growth of renewable energy in India.”
The Government of India has laid strategy to increase the share of renewable energy generation capacity from about 20% in 2018 to 40% by 2030. The project is expected help in the reduction of India’s emission intensity of its gross domestic product by 33% to 35% by 2030.
The present investment is expected to contribute to the Government of India’s Strategy and also to the ADB’s goal to provide cumulative climate finance of $80b from 2019 to 2030.
AEPL is operating since 2017 as a developer of solar energy projects in India offering clean energy products like utility scale, rooftop, and off-grid solar projects. It has secured power purchase agreements of approximately 1,700MW and with the current equity investment the company said it is adequately funded to cross the capacity of 2GW.
Mittal said: “These recent investments by global financial giants reinforce India’s prominence in the global clean energy sector. This investment by ADB validates Avaada’s execution track record and commitment in creating a cleaner and sustainable India.”