U.S. Agency for International Development (USAID) to facilitate investment via Nereus Capital
Washington, D.C. | June 24, 2013 – The U.S. Agency for International Development (USAID) announced that it will partner with U.S.-based institutional investor Northern Lights Capital Group to facilitate a $100 million investment in India’s clean energy sector via Nereus Capital. This investment, through the Agency’s Development Credit Authority, is expected to create hundreds of additional megawatts of sustainable energy capacity and will help to advance India’s burgeoning clean energy industry.
The partnership is the first time in the Agency’s history that it has partnered with a private investment fund to facilitate targeted investment. USAID will provide a 40% credit guarantee for a $100 million limited partner commitment to Nereus Capital‘s India Alternative Energy Fund managed by Northern Lights Capital Group, an institutional investor.
“USAID will be able to dramatically leverage large scale funding to help India’s transition to a low carbon economy and open-up new development opportunities for enhanced energy access,” said USAID Administrator Raj Shah, who is traveling with Sec. Kerry in India. “This investment could eventually create as much as 300-400 additional megawatts of sustainable energy capacity, which is equivalent to lighting the homes of tens of thousands of Indian families. And as our first investment in a private investment fund, it will help to facilitate access for U.S. entrepreneurs to this important emerging market.” In order to meet latent demand and address energy shortfalls, the India government has set a target of 30,000 megawatts of renewable energy generation capacity in the next five years.
Nereus Capital’s India Alternative Energy Fund directly addresses this growing demand for sustainable energy by investing in independent power producers that develop, construct, and operate alternative energy projects in India. The Fund’s investment focus includes wind power, hydropower, solar power, and large-scale energy efficiency projects. “With this commitment, Nereus has cemented its role as one of the largest pools of capital specifically focused on Indian renewable energy infrastructure,” said Jack Swift, Partner at Northern Lights Capital Group. “Nereus’ combination of investment track record and active operational value addition has enabled the firm to evolve into one of the leading financial sponsors in its space.”
“Challenges for traditional thermal power generation and persistent power deficits dictate that an increasing proportion of new power generation capacity in India will be derived from alternative energy,” said Jonathan Winer, Managing Director at Nereus. “Corresponding to this expanding market opportunity, the growth in our assets under management from this transaction allows Nereus to continue to finance leading independent power producers in India.”
“The Development Credit Authority’s loan guarantee will allow USAID to catalyze and leverage private sector investment for greater impact and scale,” said Ben Hubbard, the Director of USAID’s Development Credit Authority. “Through a comparatively small investment by the U.S. Government, we can ensure that U.S. investors can make low-risk investments that deliver high-reward for the people of India.”