CDC Group, a U.K. government-owned financial development institution, has announced a ₹2.5 billion (~$33.44 million) investment into distributed solar energy company Fourth Partner Energy. The capital from CDC will be in the form of non-convertible debentures.

CDC’s investment aims to support India’s clean energy transition and provide cleaner energy to businesses. It will fund approximately 217 MW of greenfield renewable power generation in India to displace primarily thermal power generation, avoiding 258,000 tons of annual carbon emissions. The company said it aims to accelerate the uptake of renewable energy by corporates at a quicker pace.

Fourth Partner Energy will deploy the funds towards growing its renewable solutions platform across India and South Asia.

Announcing this investment, Srini Nagarajan, Managing Director and Head of Asia at CDC, said, “We are thrilled to partner with Fourth Partner Energy, a leading player in the C&I solar in India, at a time when the nascent sector is playing an increasingly important role in decarbonizing businesses. CDC is committed to making long-term investments alongside our investment partners, with a clear purpose to bolster efforts toward achieving a net-zero carbon future in India and across the region.”

“We have been building scale in the renewable power sector and this investment into Fourth Partner Energy, on the distributed solar side of the sector, is a strategic investment that further enhances India’s renewable power capacity,” Nagarajan added.

Fourth Partner Energy has a portfolio of 550 MW across its distributed and open-access solar portfolios. The company has commenced operations across Sri Lanka, Bangladesh, and Vietnam.

Vivek Subramanian, Co-founder and Executive Director at Fourth Partner Energy, said, “Currently, we have an aggressive target to achieve 3 GW of solar capacity across all our verticals by 2025. This will mean significantly scaling up our current portfolio while growing our battery storage, energy trading, and electric vehicle charging capabilities. India’s C&I solar segment is growing exponentially, driven by strong sustainability mandates from all corporates. A long-term and patient capital provider like CDC fits perfectly into 4PEL’s financing ecosystem. CDC’s funding, guidance, and sustainability expertise will pave the way for the company to leverage and grow our dominant position in this market.”

The investment marks CDC’s foray into India’s commercial and industrial (C&I) solar segment and Fourth Partner Energy’s first major round of fundraising in 2021.

In January this year, CDC had announced a $30 million green lending facility to Tata Cleantech Capital. This first-of-its-kind facility was aimed at enabling Tata Cleantech Capital to offer loans to businesses that focus on e-mobility solutions and water and energy efficiency to help mitigate climate change.

In an earlier funding activity, Fourth Partner Energy had secured ₹1.26 billion (~$17.4 million) funding from Symbiotics to expand its distributed solar footprint. The company also raised $15 million (~₹1.1 billion) in debt funding from responsAbility, a Switzerland-based development asset manager to construct new solar assets across the company’s open access and distributed solar portfolios.