Mainstrem Impact Investment Archives - Red Ribbon Asset Management

India takes the lead: A Global Renewable Hub

By | India, News | No Comments

India’s place as the key Global Hub for Renewable Energy Generation is becoming more evident by the month: GE Energy Financial Services (GEEFS) has just announced plans to invest $90 Million towards development of a Major Portfolio of 500 MW in partnership with the RattanIndia Group.

Anjali Rattan, Chief Executive of RattanIndia, explained the background to the deal:

“RattanIndia and GEEFS are partnering to develop 500MW of solar asset technology. GEEFS will be investing $90 million for the 500MW solar portfolio and has already invested in 210MW solar projects with RattanIndia located in Government Solar Parks at Bhadla (Rajasthan), Allahabad (Uttar Pradesh), Pavagada (Karnataka) and in RattanIndia’s  home territory of Katol (Maharashtra)”.

All this comes in the immediate context of Prime Minister Modi’s Government having set India an ambitious target of adding 175 GW of clean energy by 2022; and that commitment was made in the teeth of last month’s withdrawal of the United States from the Paris Climate Accords (surely making GE’s latest substantial investment in the subcontinent’s renewable energy programme all the more striking).

GE obviously recognises the importance of India as the leading Growth Market in the World at the moment and such huge resourcing programmes provide dry powder for companies like RattanIndia to ride the tiger of India’s ambition. But bear in mind too that this is very far from being a one off venture into the subcontinent’s Renewable Energy Sector.

GEEFS has previously invested in Welspun Renewables’ Neemuch Plant in the Anantapur District of Andhra Pradesh, and there is also a parallel project in Betul in Madhya Pradesh as well as Greenko’s wind energy projects in Northern India.

These crucial developments have also, importantly, been aided by a significant reduction in the applicable tariffs for Indian solar energy generation: from Rs10.95 to 12.76 per kilowatt hour (kWh) in 2010-11. The applicable rates hit a new low of Rs2.44 per unit in May of this year where, at the auction of 500MW capacity at the Bhadla solar park in Rajasthan and last year, RattanIndia Solar won a 50MW solar project at a tariff of Rs4.43 per kWh. Through its subsidiary Yarrow Infrastructure Ltd, it also won a 70MW solar project at a tariff of Rs4.36 per kWh in an NTPC Ltd run e-auction.

So it should come as no surprise to learn that India’s installed solar power generation capacity has risen more than fourfold in the last six years. Prime Minister Modi’s Government has been promoting Solar Power as part of that evolutionary process as well as recently deciding to continue its programme of exempting solar power producers from interstate supply charges for an extended period down to December 2019:  “The decision was taken by the Ministry of Power in consultation with the Ministry of New and Renewable Energy and other stakeholders since imposition of charges would have raised the cost of using solar power from another state by Rs1-2.50 per kWh, depending on the distance it is transmitted and voltage at which it is supplied.”

It all points of course towards a brighter future for Renewable Energy on the subcontinent; underpinning Red Ribbon Asset Management’s decision (since it was founded more than a decade ago) to place Renewables at the very heart of it’s Mainstream Impact Investment Strategies. Strategies that generate above market rate returns for its investors whilst at the same time supporting stronger, long-term businesses; creating long term, resilient projects and delivering better impacts on the community, on our wider society and on the environment.

Read about Rattanindia and GE 

Read about Welspun Renewables


Renewable Energy Policies in Growth Markets

By | India, News | One Comment

President Trump’s White House has withdrawn the United States from the Paris Climate Accords, making good on a campaign pledge to throw the full weight of the Administration behind the US Coal, Car and Oil Industries. So how is that likely to affect Red Ribbon’s policy of pursuing Mainstream Impact Investment strategies in Growth Markets? Renewable Energy Projects are, after all, a core component of that strategy.

Well, the answer is “not a lot” because whatever else might be happening on Pennsylvania Avenue at the moment, the world’s fastest growing economy and the most significant Growth Market on the Planet has just pledged itself to continuing with the “largest energy transformation project in the world”.

Those are the words of India’s Energy Minister, Piyush Goyai, speaking at the opening of the Vienna Energy Forum last Month, and he went on: “Everything changed in 2015 with the Paris Climate Agreement. We must decouple economic growth from environmental impacts and leave a better world….every moment counts.”

India is planning to add 50% more solar and wind power infrastructure than is presently installed in the entire United States. It will also be replacing 770 million street and household lights and, for the first time in the country’s history, it will be bringing access to electricity to tens of thousands of poor rural villages across the subcontinent. As was announced at the Conference last month, India is also doing all of this at a much faster rate than had previously been thought possible (thanks in large part to the enormous infrastructure programmes already put in place by Prime Minister Modi’s Government).

That key dynamic between major economic investment and impact (an unprecedented investment in renewables, tens of thousands of the rural poor receiving a regular electricity supply for the first time and a growing economy) exemplifies what Piyush Goyai meant by “decoupling economic growth from environmental impact”; and the same philosophy is at the heart of Red Ribbon’s Mainstream Impact Investment strategies.

Critics have long maintained that conventional economics has focused far too much on money and markets; creating policies aimed at stimulating the economy without paying any attention to the impact those policies have on the local community and on society at large, still less on the wider environment. In sharp distinction, Mainstream Impact Investment adopts a much more holistic approach, recognising the essential interdependence between the economy, the community, society at large and the environment: because it simply doesn’t make sense to cite interventions with a positive social or economic impact if the net result adds further distress to the environment. And this applies just as much to mainstream business as it does to so-called “green causes”: because both must strive to reduce the negative impacts of creating value for society. That’s what Mainstream Impact Investment means.

So it’s nice to see that Prime Minister Modi’s Government is thinking the same way.

Read the Paris Climate Accords here

Read about the Vienna Energy Forum here

Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.