The World Bank’s International Finance unit has agreed to invest in a fund managed by Nereus Capital Management LLC that’s targeting clean-energy companies in India.
The $20 million investment is part of $250 million that Nereus plans to raise in the next year, Nereus founder Jonathan Winer said today in a phone interview from New Delhi. It already raised more than $20 million from another investor whom Winer declined to identify, citing a confidentiality agreement.
Nereus seeks to “develop hard assets on the ground,” Winer said. “We’re trying to back companies with scalable business models that address the larger opportunity created by the supply-demand imbalance in the Indian power market.”
India, which suffered the world’s biggest blackout last month, depends on coal to generate more than half its electricity and struggles with a 9 percent power deficit at peak hours. The government seeks to boost alternative energy sources as infrastructure bottlenecks cripple utilities, creating a 30- gigawatt backup power market by businesses switching to diesel generators when lights go out.
Nereus’s first investment may be in a company developing a waste-heat recovery power plant, Winer said. Such plants use heat released as a byproduct of industrial operations, such as flue gases at factories, to heat water to run turbines.
The fund is expected to make seven to 10 investments of $15 million to $35 million each, according to a summary of IFC’s investment proposal on its website. Winer said there’s no cap on the amount it invests in a single company or industry.
Potential investment targets also include developers of wind farms, small hydropower, off-grid solar projects, engineering contractors and suppliers servicing the clean-energy industry, Winer said.
The IFC has invested $3 billion in 190 funds globally, according to Vikram Raju, who heads private equity investments for the organization in South Asia.
