Investments 2022

Climate Mandate

The Climate Investment Fund became formally operative in May 2022. Since then, several significant investments have been made, putting over 2 billion NOK to work. 

SAEL Industries, India 

SAEL Group was founded in 1999 and prior to Norfund investment was 100% owned by the Singh Awla family. The Group was initially focused on agricultural solutions including agri-processing (rice milling) and agricultural warehouses. More recently, the group has expanded into energy solutions, building on their agricultural base to establish a number of power plants utilizing agricultural wastes, primarily paddy straw, as feedstock. SAEL Industries now has committed 166 MW of waste-to-energy plant and 382 MWp of solar power capacity. The waste-to-energy business procures feedstock from farmers in the Punjab region, reducing farmers burning of stubble and so helping address the concern with air pollution linked to this practice. The business provides an additional income stream to farmers as well as contributing baseload renewable power to the grid. SAEL also owns and operates a solar module assembly plant in India which provides modules to their own solar installations. 

Norfund committed ca NOK 600 million in equity to the business to support growth. The expectation is that the business will be able to grow to over 3 GW of installed capacity across both the biomass and solar technologies, which would result in ca 7 million tons of CO2 avoided annually.  

Enel Green Power, 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 financed under this partnership was the 420 MWp Thar solar plant in Rajasthan. Enel was awarded the rights to this project under a government run auction, and the plant sells power to the state-owned Solar Energy Corporation of India (SECI) under a 25 year power purchase agreement. Norfund and KLP via the investment partnership KNI India together invested ca NOK 350 million and own 49% of the plant which had a capital expenditure of USD 180 million. The plant is expected to produce ca 800 GWh per year and avoid ca 656,000 tons CO2 per year. Norfund and KLP have also provided loan guarantees so that Norfund’s total commitment level is NOK 282 million. 

The second project financed with Enel Green Power is a 168 MW wind project (“Coral”) in Gujarat state. As with Thar, Enel was awarded the rights to sell power to SECI under a government run auction and has entered into a 25 year power purchase agreement. KLP has also invested in this project with Norfund and jointly we have committed ca NOK 317 million in equity capital towards the construction of the project, in addition to loan guarantees of up to NOK 530 million. Once operational, the plant is expected to produce ca 700 GWh per year and avoid ca 573,000 tons CO2 per year. 

H1 Group, South Africa 

H1 Capital is a South African owned company, qualified as a Black Economic Empowerment (“BEE”) entity, which is active in the renewables industry. They have partnered with international power companies including Enel Green Power, EdF, Scatec and Mainstream, and own minority stakes in a number of large power plants including wind, solar and hydropower plants as well as a small waste heat recovery plant.  

Norfund has provided NOK 212 million equity to H1 Capital in the form of preference shares, as well as providing mezzanine debt to subsidiaries to support financing of underlying projects.  The projects Norfund’s climate fund has supported with mezzanine debt include: 

  • Kenhardt: This is Scatec’s solar battery project that provides dispatchable power to the grid. The project was awarded under the “Risk Mitigation” auction where the Government tendered for dispatchable power. Scatec’s project was the only pure renewables solution awarded. The installation comprises 540 MWp of solar capacity and 225 MW/1,140 MWh of battery storage under a 20 year power purchase agreement where 150 MW of power should be available 16.5 hours per day. With a total capex of ca USD 1 billion, this project is one of the largest solar and storage projects in the world. Norfund has provided a local currency loan of NOK 407 million to a subsidiary of H1 Capital to part finance H1’s 49% stake in the project. The project is expected to deliver ca 900 GWh per annum and will avoid ca 766,000 tons CO2 per annum. 

  • EdF wind portfolio: H1 has partnered with EdF for 3 x 140 MW wind projects which were awarded contracts in the 5th round of the South African renewable energy auctions.  The EdF projects were the first of this auction round to reach financial close. The projects are expected to deliver 1,400 GWh per year and avoid 1,800,000 tons CO2 per year. H1 has a 29% stake in the projects, and Norfund has provided a local currency loan of ca NOK 181 million to an H1 subsidiary to part finance the equity requirement. 

Koppal Narendra, India 

ReNew is one of the largest renewable energy independent power producers in India. In 2019-20 ReNew contributed nearly 1% of the total electricity generated in India. The company develops, builds, owns, and operates utility-scale wind energy, solar energy, and hydro projects. 

To meet growth in electricity demand over the next twenty years, according to the IEA, India will need to add a power system the size of the EU. Scaling up solar and wind energy requires significant investments in transmission lines to stabilize the grid and transport energy from the areas most suitable for solar and wind. 

The Koppal Narendra investment, made together with ReNew and KLP, is a 137 km high voltage transmission line and substation in Karnataka, India under a build-own-operate concession. ReNew is one of India’s largest renewable generation companies with close to 8 GW of capacity in operation. The Koppal Narendra project is ReNew and Norfund’s first investment in an independent  transmission asset and will allow up to 2.5 GW of renewable power to be dispatched to the national grid. The line is currently under construction and should be operational end 2023.  

Norfund is investing alongside KLP, and together we will invest around 900 million INR (109 million NOK) for 49% ownership stake in the transmission project, with ambitions for further joint investments. 

InvestmentCountryInvestment yearInstrumentOwnership shareDomicileCommitted (MNOK)
Enel Thar SolarIndia2022Equity and guarantees25%India285.2
ENEL CoralIndia2022Equity and guarantees25%India410.4
H1 CapitalSouth Africa2022EquityN/ASouth Africa212.7
H1 KenhardtSouth Africa2022LoansN/ASouth Africa406.3
H1 EDFSouth Africa2022LoansN/ASouth Africa180.4
Koppal NarendraIndia2022Equity25%India55.3