The UK government's development finance institution British International Investment (BII) plans to invest about $1 billion in Indian climate-related projects by 2026, a top official said, drawn to the country's expanding renewable energy capacity.
"We are evaluating exciting businesses in sectors such as bio-fuels, circular economy ... as part of the vision for the 2030 roadmap agreed between India and the UK," Nick O’Donohoe, CEO of BII told Reuters on Tuesday.
In India, BII invested over $300 million in climate finance last year in sectors such as renewable energy, electric mobility and sustainable agriculture.
Its' current portfolio in India is valued at $2.2 billion with investment in over 290 businesses. Last year, BII agreed to invest up to $250 million in automaker Mahindra and Mahindra Ltd's new electric vehicle unit.
"India has produced the best returns of any geography we have invested in," said O’Donohoe, citing buoyant stock markets and a stable political environment in the country.
The company has about 8.2 billion pounds ($9.98 billion) worth of assets through its investments in around 1,500 businesses in emerging economies across 65 countries.
On total portfolio investment, the company got 5% in annual return over a rolling 7-year period, he said, declining to give detail on returns on Indian investments.
He, however, said the Indian economy was going through a "good phase" compared with BII's investments in some African nations, where high debt, inflation and weakening currencies had impacted returns.
BII wants to invest in new entrepreneurs and companies that are struggling to raise funds for their emission-cutting projects, he said.
