Climate Investment Fund makes its first exit 

The Climate Investment Fund is selling its stake in a power line project in India, marking its first exit since its establishment in 2022.

As climate change intensifies, smallholder farmers are caught in a vicious cycle of low productivity and environmental degradation. The Climate Smart Fund offers a promising model that addresses poverty alleviation alongside climate mitigation and adaptation, equipping farmers with the tools they need to thrive sustainably.

Anne-Beate Tvinnereim

Development Minister of Norway

speaking from COP 29

Konexa har en innovativ forretningsmodell, og vi er glade for å kunne bidra til Nigerias langsiktige sosiale og økonomiske utvikling med denne investeringen.

Birgit Edlefsen

Birgit Edlefsen

speaking from SVP, Norfund

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“By selling when we are no longer needed and recycling the capital, we achieve more climate impact,”

Bjørnar Baugerud

Head of the Climate Investment Fund

Managed by Norfund, the Climate Investment Fund was set up in 2022 to help avoid greenhouse gas emissions through profitable investments in renewable energy in developing countries with high emissions. Three years later, the fund is making its first exit from a project. 

Connected 2.5 GW of wind power in India 

In partnership with the Indian company ReNew Power, Norfund and Norway’s largest pension company KLP invested 900 million rupees (109 million NOK) in a power line project in the Koppal district of southern India in December 2022. The project was completed in October 2023.

“Through the investment, we have helped connect 2.5 GW of developed wind power to the national grid, enough to meet the needs of 7 million Indian households,” says Bjørnar Baugerud, head of the Climate Investment Fund at Norfund.

According to the Central Electricity Authority (CEA) in India, the country will need 170,000 kilometers of transmission lines and 47 GW of energy storage capacity (BESS) over the next eight years to phase in increased renewable power production.

Recycling with returns ensures efficient use of public capital

According to its mandate, the Climate Investment Fund is to “reinvest earned and freed-up funds from its investments.”

The project is now being sold to the Indian company Indigrid, with which Norfund also recently entered into a partnership for the development of new projects.

“As soon as we are no longer needed as an investor in a project, we will seek to sell to private entities so we can reuse the money and contribute more to avoiding emissions,” says Baugerud.