Shalivahana Green Energy Limited (SGEL), a Hyderabad-based biomass power company, will get $15 million in equity from IFC, a member of the World Bank Group.
The investment will support the company's expansion of about 200 MW of its biomass power projects in Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Tamil Nadu. The company has a capacity of 50.4 MW.
Through its post-2012 Carbon Facility, IFC will also commit to purchase up to 1.5 million Certified Emission Reductions or CERs from energy projects developed by Shalivahana during 2013 to 2020. IFC will pay for a pre-agreed percentage of the spot price of the CERs at the time of delivery, subject to a minimum price.
“IFC's support will help us raise funds, adds credibility to our work, and raise the generation capacity of our portfolio over the next four years. The post-2012 Carbon Facility will help us generate sustainable revenues in the long run despite the uncertainties in the global carbon market,” said Mr M. Komaraiah, Chairman and Managing Director of SGEL.
“Improving access to regular and clean power supply is a key strategic priority for IFC in India. Our post-2012 Carbon Facility provides the Shalivahana Group with a high-quality revenue stream from CERs up to 2020 to strengthen the viability of their projects,” said Mr Thomas Davenport, IFC Director for South Asia, said in a press release.
SGEL is the flagship entity of the Shalivahana Group. The Group's operations are primarily in power generation from non-conventional energy sources such as biomass and waste residue. Apart from IFC, Axis Infrastructure Fund 1 and IL&FS Renewable Energy Limited have also invested in the company.