IFC to put $130m into Indian wind projects

April 27, 2012

The International Finance Corporation, the World Bank Group’s private sector investment arm, is planning to invest USD130 million in Inox Renewables, a subsidiary of Gujarat Fluorochemicals, which will go toward building 400-MW of wind projects in the Indian states of Rajasthan and Gujarat.

The financing will be provided in the form of USD40 million of equity and USD90 million of senior secured debt. The total cost of the 400-MW wind project is put at around USD480 million and is due to be implemented by March 2013.

Unlike China’s wind market, which contracted last years and looks set to slow further, India’s remains healthy thus far and the country’s wind resources are far from being fully exploited. A recent change in India’s tax code, however, has cut the level depreciation that wind farms will enjoy going forward, leading to predictions of an industry slowdown.

Gujarat Fluorochemicals, which has also subsidiaries in a number of areas including industrial gases, fluorochemicals, cryogenic equipment, recently transferred its 65-MW wind energy business to INOX Renewables. The company is looking to build up to 3G-W of wind projects by 2017, the majority of which will be built in Rajasthan and Gujarat.

INOX Renewables currently owns a 4-MW wind farm in Tamil Nadu, two wind farms in Rajasthan, a 23-MW farm in Maharashtra and a 50-MW site in Gujarat. It also has a 100-MW wind farm under construction in Dangri, Rajasthan.