Norway’s Norfund Commits Investment In Solar Energy Project in Rajasthan

The Norwegian Climate Investment Fund has said that it has entered into an agreement to take a 49% stake in a 420 MW solar power plant in Rajasthan, India, that is developed by Italy-based energy provider, Enel. With the investment, Norfund has within a short time put a total of NOK 1.8 billion to work to avoid greenhouse gas emissions through the new fund.

The Climate Investment Fund is managed by Norfund and KLP, Norway’s largest pension company. According to the official statement, Norfund and KLP together will take a 49% stake in the Thar  Surya 1 solar energy project for approximately Rs 2.8 billion which is worth 420 MWdc  (300 MWac) and is being built by Enel Green Power.

“This summer with extreme heat and drought in many parts of the world has shown us, more clearly than ever, there is no time to waste in the fight against climate change. That is why it is such good news that in record time the climate investment fund’s money is already working for these crucial investments in renewable energy in developing countries”, said, Norway’s Minister of International Development Anne Beathe Tvinnereim.

Climate Investment Fund will allocate 10 billion NOK over the next five years, with 1 billion coming from Norfund’s capital and 1 billion from the state budget each year. Since Norfund can advance parts of the fund that originate from Norfund’s own capital, the total amount in the fund could already reach 2.8 billion NOK by the end of 2022.

Investment Needs in India

Norfund says that when the project is up and running it will deliver over 750 GWh annually. Given India’s current energy sources, with a considerable proportion coming from coal, the project will avoid more than 615,000 tonnes of Co2 emissions per year.

Tellef Thorleifsson, CEO of Norfund states, “We are extremely glad to have this large-scale investment in place. If India is to base its energy needs on renewables there is an enormous need for capital, which we are contributing to in part with the new climate investment fund.”

 “KLP and Norfund have been investing in developing countries together for a decade, and we are very excited to enter a market like India where there is such a great need for renewable energy. Cutting emissions to meet the Paris Agreement will require phasing out coal. KLP has a goal to increase climate-friendly investments by at least six billion NOK every year. The effect on the environment is positive, and provides returns to our owners,” says Sverre Thornes, CEO at KLP.

Strategic Cooperation With Enel

Norfund states that it has also entered a strategic investment partnership with Enel Green Power in India. “This is the first investment we have done with Enel, and together we have great ambitions to contribute with similar investments in India in the years to come,” says Thorleifsson.