Isra-Mart srl:Northern Lights sets sights on Indian clean tech investment

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Isra-Mart srl news:

US asset manager Northern Lights Capital Group has invested in Nereus Capital Group to help finance green energy projects in India, the two firms announced yesterday.

Northern Lights will provide an undisclosed level of funding to Nereus's flagship India Energy Fund, which offers flexible financing to companies developing wind, solar, biomass and hydropower projects in India, typically investing between $5m and $35m per project.

Jonathan Winer, founder of Nereus, said Northern Lights would bring investment capital and distribution support to the partnership, while the venture capital group would bring "experience in private equity, project finance, and renewable energy to what is one of the world's fastest-growing energy markets".

India is expected to invest up to $30bn in renewable energy over the next decade, in an effort to keep pace with energy demand that it expected to grow eight per cent a year.

Renewable energy is also a key part of the government's 11th economic plan to deregulate the energy industry, bridge the current supply gap, and decarbonise supply. As a result, the country is attracting burgeoning interest from investors keen to cash in on the large number of clean energy projects currently at the planning stage.

Earlier this year, the Indian government also launched its National Solar Mission, which aims to have 1GW of grid-connected solar power by 2013, while recently introduced feed-in tariffs for wind, solar and waste-from-energy projects have provided long-term certainty for investors.

According to Nereus, historic inefficiencies in the Indian power industry have also led to electricity being expensive, making many renewable projects economical even without government incentives or substantial debt.

Tim Carver, managing director at Northern Lights, said this combination of factors meant the nation's renewable energy sector was a good place to invest at the moment.

"Among emerging markets, India is one of the most attractive places to deploy private equity capital," he said. "With the unique economics of its energy market, it can provide excellent risk-adjusted return for equity financing of green infrastructure."