FCC

Norwegian Climate Fund to invest in Gujarat’s wind power plant

2023-06-21

The Norwegian Climate Investment fund, managed by Norfund, and KLP, Norway’s largest pension company, together has committed equity and guarantees for a 168 MW wind power plant developed by Enel Green Power in India.

Enel Green Power, founded in 2008 within the Enel Group to develop and manage renewable power projects globally, operates over 59 GW of installed renewable capacity in Europe, Asia, Africa and the Americas. In July 2020, Norfund and Enel Green Power entered into a joint investment agreement for renewable energy projects in India. The first project together, the 420 MW Thar solar plant, was announced in August 2022.

This second project is a 168 MW wind project in Gujarat. As with Thar, Enel Green Power was awarded the rights to sell power under a government auction and has a 25-year power purchase agreement. Via the investment partnership KNI India, Norfund brings along KLP, Norway’s biggest pension company, with joint commitments of ca NOK 317 million (INR 2,4 billion) in equity capital and loan guarantees up to NOK 530 million (INR 4 billion) towards the construction of the project. (The Climate Investment Fund owns 51% and KLP 49% of KNI India).

The plant, which has been put into operation, is expected to produce ca 700 GWh per annum. Given India’s current energy sources, with a considerable proportion coming from coal, the project will avoid ca 573,000 tons CO2 per annum*.

The investment is the fourth made under the Climate Mandate in India, the country with the world’s greatest need for growth in the energy sector. To meet growth in electricity demand over the next twenty years, India will need to add a power system the size of the current EU production, according to the IEA. In 2022, India’s power output grew at the fastest pace in 33 years, and coal-fired power output grew by a staggering 12.4%. That also meant that emissions from power generation rose by nearly a sixth, to 1.15 billion tons, according to a Reuters analysis.