Tag: cdc

CDC Group invests USD 70 mn in first dedicated climate finance fund, BFSI News, ET BFSI

Personal Finance

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Mumbai, The CDC Group, Britain’s official development finance institution and impact investor, has invested USD 70 million into the Green Growth Equity Fund (GGEF), the country’s first dedicated climate change fund. The fund is managed by EverSource Capital, a joint venture between the private equity fund Everstone Group and Lightsource BP, British Petroleum‘s renewable energy platform.

The GGEF already has strong climate credentials and within its portfolio has many investments such as Radiance, a renewable energy solutions for commercial and industrial customers; the e-mobility platform Greencell Mobility; the utility-scale renewable energy platform Ayana; integrated waste management platform EverEnviro; and wastewater management platform Kathari, the CDC Group said in a statement on Friday.

With the CDC investment, the green fund will finance the development of 6-8 green infrastructure companies here.

The GGEF is different from many funds as it follows a platform model, which mean that it sets up a firm from scratch in an interested sector and then grows the platform by making acquisitions.

By consolidating lots of smaller companies with similar business models under one roof, the platform can achieve both operational efficiencies and scale, which is key to improving profitability and building size to attract a buyer.

The GGEF, as a pioneer in the green infrastructure space in the country, will hopefully play a catalytic effect by proving that investors can earn returns while directly contributing to climate objectives.

“This investment in GGEF will consolidate our role in India as a staunch supporter of the country’s low carbon future,” said Srini Nagarajan, the managing director and head of Asia at CDC Group.

Dhanpal Jhaveri, chief executive of EverSource Capital, and vice-chairman of the Everstone Group, said, his group is committed to bringing positive climate impact by catalyzing capital for and investing in high growth platforms and businesses.

Last month, CDC announced an ambition to invest up to USD 1 billion in climate funding to India over the next five years ending FY’26. The commitment will fund climate mitigating projects and businesses here and enhance national efforts to align with the Paris agreement.

Over the past four years, CDC has invested over USD 1 billion in climate finance across Africa and South Asia.

CDC already has a USD 2 billion portfolio in the country. PTI BEN MKJ



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Northern Arc and CDC tie-up for pool bond issuance of Rs 320 cr to support six MFIs, BFSI News, ET BFSI

Banking & Finance

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UK’s Development financial institution, CDC Group has tied-up with Northern Arc to jointly structure a pooled bond issuance transaction by partial guarantee provided by Northern Arc.

CDC’s Rs 320 crore investment in a pool of senior secured NCDs will provide systemic liquidity to six leading microfinance companies: Annapurna Finance, Arohan Financial Services, ASA International, Asirvad Microfinance Limited, Chaitanya India and Fusion Microfinance.

The investment is expected to support MFIs in providing over 630,000 new micro-loans to low-income households.
Srini Nagarajan, Managing Director and Head of Asia at CDC, said: “This exciting partnership with Northern Arc marks CDC’s first Pooled Bond Issuance in India, and comes at a time when systemic liquidity is critically needed to mitigate the impact of COVID-19 on vulnerable population in India. We are pleased that our investment will facilitate access for small businesses and will especially ensure that more women in India have improved access to finance, helping to uplift their livelihoods, households and communities.

The PBI product, developed by Northern Arc, pools together for one investor a set of debentures issued by diverse entities. These debentures are partially guaranteed by Northern Arc. For this transaction, Northern Arc worked with CDC through a virtual due-diligence process that covered all six entities, and to structure a product that meets the risk and return requirements of the investor.

Dr Kshama Fernandes, Chief Executive Officer of Northern Arc Capital said: “Northern Arc’s forte has been to introduce impact sectors to investors through its innovative products and structures. CDC’s first investment in a Pooled Bond Issuance in the microfinance sector in India is testament to this. The structure has enabled originators to efficiently access a global DFI and avail long tenor debt on their balance sheet. We see this as a beginning of a long-term partnership that will enable our clients to raise capital through cycles.”



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IIFL Home Finance, Standard Chartered enter into co-lending partnership, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: Fairfax and CDC-backed IIFL Finance on Tuesday said its wholly-owned subsidiary IIFL Home Finance Ltd and Standard Chartered Bank have entered into a co-lending arrangement for extending MSME loans.

Under this partnership, IIFL Home Finance Ltd and the Standard Chartered Bank will co-originate these loans and the IIFL Home Finance Ltd will service the customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing, IIFL Finance said in a regulatory filing.

“We believe this is one of the first co-lending partnerships after the RBI’s revised guidelines,” Monu Ratra, the CEO of IIFL Home Finance, said.

IIFL Home Finance in December partnered with ICICI Bank to provide affordable housing and MSME loans as a sourcing partner. In October CSB Bank had also partnered with IIFL Finance for sourcing and managing retail gold loan assets.

IIFL Finance is a retail-oriented non-banking finance companies (NBFC) with about 90 per cent of its Rs 41,000 crore loan book under the retail category.

In November last year, the Reserve Bank had came out with a Co-Lending Model (CLM) scheme under which banks can provide loans along with NBFCs to priority sector borrowers based on a prior agreement.

The CLM, an improvement over the co-origination of loan scheme announced by the RBI in September 2018, seeks to provide greater flexibility to the lending institutions.



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