International Finance Corporation (IFC), an investment arm of the World Bank, will pick up a substantial minority stake in Chennai-based Auro Mira Energy Company Private Ltd (AME), a renewable energy focused company.
IFC which has earlier committed a debt instrument of $6.25 million in Auro Mira Bio Systems Kanyakumari Private Ltd, a 100% subsidiary of Auro Mira Energy Private Ltd, has decided to pick a stake in the company with a fresh investment of $10 million into AME, said sources. The Kanyakumari subsidiary is setting up 18-mw biomass project.
When FE tried to contact officials to know about the exact stake sale, the company spokesperson were not available for comments. However, market sources said, IFC may end up picking up a substantial minority stake in the expanded capital of AME. Baring Private Equity Partners, which has invested around $22 million over a period of time, is holding majority stake in the company, the sources added.
AME is currently in the process of developing biomass, small hydro and wind with a combined capacity of over 100 MW in Tamil Nadu, Karnataka, Orissa and Madhya Pradesh. The debt funding for most of the above projects has been tied up and the company is raising capital to execute the above projects.
AME, which was founded in late 2005 by N Srinivasan and his associates, will be focusing on the renewable energy sector. AME plans to develop a portfolio of several hydro, biomass and wind power assets across many states and has been engaged in raising funds through a mix of debt and equity.
AME is planning to develop projects at multiple locations in the states of Tamil Nadu, Karnataka, Orissa and Madhya Pradesh. The project will have economic benefits by providing a reliable source of income to local rural community out of their waste product, facilitating power to the power deficit state of Tamil Nadu; reducing reliance on electricity generated from fossil fuels such as coal and gas; providing employment to local people during construction and during operation and generating global benefits in the form of greenhouse gas emissions reduction.
IFC brings long-term equity which is needed for supporting renewable energy plans of the company. Apart from this, IFC also will bring in its global knowledge of renewable energy sectors to help grow Auro Mira in a big way. Also, IFC’s expertise will help Auro Mira to derisk a number of areas like biomass.