Indian wind power facility to receive investment from Norwegian Climate Investment Fund

20 Jun 2023 , 12:21 PM

Together, the largest pension company in Norway, KLP, and the Norwegian Climate Investment fund, run by Norfund, have pledged ownership and guarantees for a 168 MW wind farm being built by Enel Green Power in India.

Over 59 GW of installed renewable capacity are operated by Enel Green Power, a subsidiary of the Enel Group created in 2008 to develop and manage renewable power projects globally. This capacity is located in Europe, Asia, Africa, and the Americas. A joint investment agreement for renewable energy projects in India was signed by Norfund and Enel Green Power in July 2020. The 420 MW Thar solar facility was announced as the group’s first project in August 2022.

Gujarat’s second project is a 168 MW wind farm. Similar to Thar, Enel Green Power has a 25-year power purchase agreement and was granted the ability to sell electricity through a government auction. With combined commitments of about NOK 317 million in equity capital and loan guarantees up to NOK 530 million for the project’s construction, Norfund collaborates with KLP, Norway’s largest pension company, through the investment partnership KNI India. (51% of KNI India is owned by The Climate Investment Fund, and 49% by KLP).

The facility, which is already in operation, is anticipated to produce around 700 GWh annually. Given India’s present energy mix, which includes a sizable amount of coal, the project will prevent about 573,000 tonnes of CO2 annually.

In India, the nation with the highest demand worldwide for energy sector expansion, the investment is the fourth made under the Climate Mandate. According to the IEA, India will need to install a power infrastructure the size of the existing EU production to handle the increase in electricity demand over the next 20 years.

The most recent investment is a part of a total commitment of NOK 2.14 billion made in the first year of the new Climate Investment Fund, which will receive NOK 10 billion over the following five years (1 billion from Norfund’s capital and 1 billion from the state budget each year), according to the government

The commitments of this first year will already support projects with total estimated avoided emissions of 6.2 million tonnes CO2 per year*, according to calculations in the current annual report of the fund, which started operating last year. This amounts to 13% of Norway’s yearly emissions.

The initiative that was revealed on Monday is the third investment made through the Climate Investment Fund, which also includes KLP as a co-investor.

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