Dutch development bank FMO will invest $137 million (about ₹1,000 crore) in India’s Green Growth Equity Fund (GGEF), managed by EverSource Capital, while the fund aims to raise a total of $940 million.

GGEF is raising the capital to invest in the country’s green infrastructure sectors such as renewable energy, transport, resource efficiency and energy services. The fund will also invest in value chain, water, waste and transport sectors that promote low carbon and climate-resilient initiatives.

The fund-raising was approved by South Korea-based Green Climate Fund’s (GCF) board, the world’s largest dedicated climate fund, EverSource Capital and FMO said in a joint statement.

“This is the largest single country amount approved by GCF ever for a private sector equity fund focused on climate mitigation. This investment commitment strengthens our resolve and ability to work towards supporting India's climate objectives and Sustainable Development Goals along with creating impact and value in India’s clean energy ecosystem,” EverSource Capital Chief Executive Officer Dhanpal Jhaveri said.

India faces major climate change challenges mainly due to greenhouse gas (GHG) emission-induced warming. The country faces increasingly extreme weather events and natural hazards, putting pressure on critical natural resources such as water while damaging infrastructure and threatening livelihoods.

There is a clear need for far-reaching mitigation and adaptation measures since GHG emissions in India are the third-largest in the world, contributing to 7 per cent of global emissions and temperature rise. The country needs a total of $2.5 trillion over 2016-2030 to ensure low-carbon and climate-resilient pathways. A study by Climate Policy Initiative says that India is mobilising less than 25 per cent of the investment needed to reach this target.

“Apart from contributing to India’s climate goals, GGEF contributes to job creation and increased economic activity. This stimulus is particularly timely now, in a Covid-19 pandemic environment, which is threatening India with an economic slowdown, job losses and negative implications for businesses,” Linda Broekhuizen, CEO ad interim at FMO, said.

EverSource Capital’s GGEF aims to reduce GHG emissions and increase access to India’s alternative water resources through investments in wastewater treatment and desalination plants.