Tata Capital Limited, in association with the International Finance Corporation, has formed Tata Cleantech Capital Limited (TCCL), which proposes to provide financing and advisory services to small and medium enterprises and large corporate houses that are engaged in climate change initiatives.

Under the tie-up, IFC would invest up to 19.5 per cent stake in the equity capital of TCCL while the rest would be contributed by Tata Capital Limited.

The carrying-on of financing activity by TCCL would be subject to it receiving Non-Banking Financial Company registration from the Reserve Bank of India, according to a company statement.

Mr Praveen P Kandle, Managing Director and CEO, Tata Capital Limited said: “We are also looking out for other strategic partners who are international players, and once they join, the equity participation would be reworked between them, but Tata Capital could continue to hold 80 per cent of the equity stake.”

“Depending on how the business grows, we are expecting to put in capital investment of between $100 million and $120 million over the next five years and expect to do business of about $750 million over the same time period,” he added.

Mr Lars H. Thunell, IFC Executive Vice-President and CEO said: “Initially, we would be contributing about $4 million to $5 million and increase it to about $20 million in the next couple of years.”

Initially, TCCL will focus on key areas including energy efficiency of SMEs, renewable energy generation projects and water management projects. Over a period of time, TCCL will be open to looking at other areas including sustainable agriculture projects, smart grid projects, clean transportation and pollution control.

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