With the green movement taking the world by storm and making headway in India, though at a slower pace, mutual funds have become the latest entity trying to cash in on new vistas. From investing in companies, to pumping in funds in clean-technology manufacturers, mutual funds are devising new ways for Indian investors to go green as well.
This week, the IFC — the private sector lending arm of the World Bank group — announced it would make its first investment of euro 15 million in a third-party environment-focused private equity fund managed by Aloe Private Equity. The fund, with its corpus of euro 140 million, is targeted at investing in small emerging companies, primarily in India and China, that are focused on clean and renewable energy, emissions controls, waste recycling and eco-processes. The aim: To promote companies that are unlikely to receive funding from mainstream private equity groups.
Besides the IFC, Swedfund — a risk capital company owned by the Swedish government and Propoarco, the private sector financing arm of the French Development Agency — would also invest euro 8 million and euro 5 million respectively in the same fund, indicating the growing popularity of such green endeavours.
In April 2007, ABN AMRO forayed into the environment movement in India by launching the first ‘sustainable development’ fund in the country. The fund invests in companies that are socially responsible, environment-friendly and less polluting. Apart from ABN, a Dubai-based investment group, and Sindicatum Carbon Capital holdings have plans to invest $600 million for projects that produce carbon-emission credits.
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