The Asian Development Bank (ADB) has announced that it will invest $50 million in Indian renewable energy independent power producer Avaada Energy Private Limited. Avaada aims to use the capital to expand its solar energy generation capacity in India.

The ADB and Avaada entered into an agreement which was signed by the chairman of the company Vineet Mittal and ADB’s principal investment specialist Mayank Choudhary.

“Supporting renewable energy capacity enhancement by way of debt and equity is a key focus area of ADB’s private sector strategy,” said Choudhary. “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,” he added.

“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,” said Mittal.

Avaada is a developer of utility-scale, rooftop, and off-grid solar projects. The company has secured power purchase agreements of about 1,700 megawatts. Last year, Mercom reported on the news of Avaada winning 150 MW capacity in the Pavagada Solar Park tender.

The investment is expected to come from ADB’s Ordinary Capital Resources (OCR). The OCR operations support lending to sectors such as agriculture and natural resources, education, energy, finance, health and social protection, industry and trade, public sector management, transport and information and communication technology, multisector, and water supply and other municipal infrastructure and services.

Also, Leading Asia’s Private Sector Infrastructure Fund (LEAP) will also provide investment to Avaada, the funding arrangement will be provided by the Japan International Cooperation Agency, which is administered by ADB.

According to the ADB, this investment will contribute to the Indian government’s goal to increase the share of renewable energy generation capacity from about 20% in 2018 to 40% by 2030, thereby reducing India’s emission intensity of its gross domestic product by 33% to 35% by 2030.

In 2018, the ADB made commitments of new loans and grants amounting to $21.6 billion. This investment is expected to contribute to ADB’s goal to provide cumulative climate finance of $80 billion from 2019 to 2030.

According to Mercom’s India Solar Project Tracker, Avaada Energy’s solar portfolio includes 305 MW of commissioned projects and 700 MW under various stages of development.

Recently, Mercom reported on ADB signing an $11.5 million loan agreement with Baikonyr Solar LLP for the expansion of solar power in Kazakhstan.