Northern Arc Capital, a non-banking finance company which manages six active funds and counts International Finance Corporation, Eight Roads, Affirma Capital, Accion, LeapFrog and Sumitomo Mitsui as investors, has onboarded two institutional investors for its maiden climate-focused fund.
The newly listed company said Thursday it has received a debt commitment of $50 million from the US International Development Finance Corporation (DFC) and $15 million from Austrian development bank OeEB for the climate fund.
Northern Arc didn’t disclose the vehicle’s target size and the fundraising timeline.
The investment vehicle, located in Gujarat’s GIFT City and governed by the International Financial Services Centres Authority, is a close-ended fund. It will offer debt financing to growth-stage companies operating in sectors including solar energy, energy efficiency, green buildings and materials, e-mobility, and sustainable agriculture. Its other focus areas will be circular economy, water, and adaptation technologies that seek to reduce environmental impact.
“By channelling these funds into green projects across our focus sectors of MSME, affordable housing, vehicle finance, agriculture finance, microfinance and consumer finance, we aim to create a cascading effect that promotes sustainable development,” said Ashish Mehrotra, managing director and chief executive, Northern Arc.
VCCircle reported last month that the company’s fund management arm, Northern Arc Investment Managers, was looking to mark the final close of its latest performing credit fund in the next one year. The Northern Arc Finserv Fund has a target corpus of Rs 1,000 crore and a greenshoe option of Rs 500 crore.
As of June 30, Northern Arc had exited four of its funds with net fund returns in the range of 11.7-15.8%, post-expense pre-tax.
The NBFC’s total assets under management are valued at about Rs 15,121 crore, according to a press statement.