Norway fund invests Rs 900 million in Karnataka’s transmission project

NEW DELHI: The new Norwegian Climate Investment Fund, managed by Norfund, together with KLP, Norway’s largest pension company, made the first investment of Rs 900 million in an Indian transmission project in Karanataka on Tuesday being developed by ReNew Power.

“Together for the #GreenTransition! Norway’s Climate Investment Fund, managed by @norfund, & largest pension fund @KLPkvitrer make 900 million INR investment in transmission project by @ReNew_Power in Karnataka. @CMofKarnataka@MinOfPower @mnreindia Norway-India,” tweeted Norwegian Ambassador to India, Hans Jacob Frydenlund.

In partnership with ReNew Power, one of the largest renewable energy independent power producers (IPPs) in India and globally, Norfund and KLP will invest around Rs 900 million for 49 per cent ownership stake in ReNew’s transmission project in Koppal with ambitions for further joint investments, read the statement from the Norwegian embassy in India.

To meet the growth in electricity demand over the next 20 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 stabilise the grid and transport energy from the areas most suitable for solar and wind parks.

“India succeeding in its green transition is key for the world to succeed in combating global warming. I’m glad Norway can contribute to enabling the expansion of renewables in India through investing in transmission lines”, said 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”, said Sumant Sinha, chairman and CEO of ReNew Power.

The Norwegian investment in Karnataka will connect 2.5 GW of renewable capacity connected to the national grid.

“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,” says Bjornar Baugerud, vice-president, of Clean Energy in Norfund.

The project will consist of a 5×500 MVA 400/220 kV sub-station at Koppal with 400 kV D/C quad moose transmission line from Koppal sub-station to Narendra New sub-station and 400 kV GIS Extn at Narendra New (Koppal project). Its commercial operations are expected to start in the first quarter of FY24, added the statement.

“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”, said Aage Schaanning, chief financial officer at KLP.

Notably, this will be the third investment of the climate investment fund in India. The fund has already made two previous investments in India — in a large-scale solar park with Enel and in Fourth Partner Energy, India’s leading developer of distributed solar energy solutions.

Operational since May, Norway’s new Climate Investment Fund, managed by Norfund, will reduce and avoid emissions by investing in renewable energy in developing countries with significant emissions from coal power and other fossil fuels, said the statement.

The new Norwegian Climate Investment Fund received NOK 1 billion (Norwegian Kroner) in the state budget for 2022, matched by an equal sum from Norfund’s capital, and the Parliament has now approved another NOR 1 billion for 2023. The plan is for the fund to reach NOK 10 billion within five years.

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

ReNew is one of the largest renewable energy IPPs in India. ReNew develops, builds, owns and operates utility-scale wind energy, solar energy, and hydro projects. As of November 01, 2022, ReNew has a gross total portfolio of approximately 13.4 GW of renewable energy projects across India, including commissioned and committed projects, read the statement.

According to IEA, yearly investments in renewable energy in developing countries need to increase seven-fold from today’s $150 billion to over $1 trillion from 2026 to 2030, if we are to reach the 1.5-degree limit. At the same time, a new report from Bloomberg NEF shows investments in renewable energy in these markets have fallen to the lowest level since 2016. (ANI)