The New Norwegian Climate Investment Fund, managed by Norfund in collaboration with KLP, Norway's largest pension company, will make its first investment of 900 million INR in a ReNew Power transmission project in India.

Norfund and KLP will invest approximately 900 million INR (109 million NOK) in ReNew Power, one of the largest renewable energy independent power producers (IPPs) in India and globally, for a 49% ownership stake in ReNew's transmission project in the Koppal district of Karnataka, with plans for additional joint investments.

“India succeeding in its green transition is key for the world to succeed in combating global warming. I’m glad Norway can contribute to enable expansion of renewables in India through investing in transmission lines,” according to Norwegian Ambassador Hans Jacob Frydenlund.

“Investment in the transmission sector provides synergies with our core RE portfolio and demonstrates our success in capital recycling. As a leader in India's energy transition, we are excited to partner with Norfund and KLP to support India’s green energy transition and look forward to strengthening this partnership in the future”, according to Sumant Sinha, Chairman, and CEO of ReNew Power.

“Through this investment we are contributing to the connection of 2.5 GW of planned renewable power in the south being connected to the national grid. We are pleased to make Norfund’s and the Climate Investment Fund’s first investment in the sector, and we look forward to strengthening our partnership with Renew,” according to Bjørnar Baugerud, Vice President, Clean Energy in Norfund.

The project will include a 5 x 500 MVA 400/220 kV substation at Koppal, as well as a 400 kV D/C quad moose transmission line from Koppal to Narendra New and a 400 kV GIS Extn at Narendra New in Karnataka (Koppal Project). Its commercial operations will begin in the first quarter of FY24.

“This investment will reduce bottlenecks in the Indian transmission system and open the way for new renewable power generation to produce electricity to meet rising Indian demand. We expect the project to both generate attractive returns and have a strong climate impact,” according to Aage Schaanning, Chief Financial Officer at KLP.

Norway's new Climate Investment Fund, managed by Norfund and operational since May, will reduce and avoid emissions by investing in renewable energy in developing countries with significant emissions from coal power and other fossil fuels. The fund has previously invested in India in two projects: a large-scale solar park with Enel and Fourth Partner Energy, India's leading developer of distributed solar energy solutions.

The new Norwegian Climate Investment Fund was allocated 1 billion NOK in the state budget for 2022, which was matched by an equal amount from Norfund's capital, and the Parliament has now approved another 1 billion for 2023. The fund is expected to reach 10 billion NOK in five years.

“Norfund has identified potential investments for over 8 billion NOK. Faced with the total needs, our contributions are moderate, but there are great possibilities for scaling up,” noted Baugerud.