IFC to Invest $150 Million in Aditya Birla Finance

The International Finance Corporation (IFC), a member of the World Bank Group, plans to invest $150 million in Aditya Birla Finance Limited (ABFL).

The loan amount would be utilized by ABFL to fund solar projects in select states of the country.

ABFL is a 100 percent subsidiary of Aditya Birla Capital Limited (ABCL), which is the holding company for all the financial services businesses of the Aditya Birla Group (ABG).

The IFC will make the investment through Non-Convertible Debentures (NCDs) issued by ABFL or INR External Commercial Borrowings (ECB) loan which would comply with the guidelines set by country’s apex banking body, the Reserve Bank of India (RBI). The NCD issuance shall comply with the guidelines set by the Securities and Exchange Board of India (SEBI) for green bonds.

“The ECB loan would be issued under Track III of RBI’s ECB guidelines, or subscription to secured, fixed, rated, listed Non-Convertible Debentures (NCDs) proposed to be issued by ABFL,” the IFC said in a media statement.

The project will be the first dedicated climate finance funding for ABFL and will give it an opportunity to foray into the global climate finance market.

“The IFC’s engagement with ABFL will support the latter’s commitment to the renewable energy sector, sending a positive signal to the market, and is likely to attract other local and international financial institutions to increase their investment in this sector,” the IFC statement added.

The IFC, the private investment arm of the World Bank, has been actively involved in the developing countries, providing them with the required investments and advisories to promote private sector’s development.

Recently, Mercom had reported that the IFC has also planned to provide $50 million as senior or IFC-A loan to Mahindra Renewables Private Ltd. (MRPL). MRPL, a Mahindra Group company, will use the loan to develop a 250 MW grid-connected solar photovoltaic (PV) project in Madhya Pradesh’s Rewa Ultra Mega Solar Park.

In November 2017, CleanMax Solar, an Indian rooftop solar developer, raised $15 million in investment from the IFC. The IFC had planned to invest in compulsorily convertible debentures in CleanMax Solar. This was the first time IFC was buying equity shares in a distributed-generation firm. The proceeds of the IFC investment will be utilized to fund the construction of green field solar projects across India.