IFC as implementing entity of the Canada-IFC Blended Climate Finance Program would provide a US$25 million subordinated loan (“blended concessional finance co-investment”). The use of the blended concessional finance co-investment will be to finance the expansion of distributed generation assets across India, which would not otherwise be achievable due to participation constraints including limited availability of long-term financing for Open Access distributed generation solar projects, relatively nascent Rooftop Solar business model. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be 0.34% of the total project cost. The total cost of the project is US$343 million. This estimate is based on the difference between (i) a “reference price” and (ii) the “concessional price” being charged by the blended concessional finance co-investment. As is the case with IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance, and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance.

56.20 million (USD)

Product Line	IFC Investment (million USD)
Risk Management	1.20
Guarantee
Loan	55.0
Equity

* These investment figures are indicative

The Project is expected to increase RE capacity in India resulting in positive environmental effects through the reduction of GHG emissions. The proposed investment supports efforts to reduce the GHG footprint of energy sector, which remains dominated by thermal generation, and contribute to meeting the country’s renewable energy targets and updated Nationally Determined Contribution (NDC) to the Paris Agreement. The Project is also expected to help meet India’s energy demand by providing renewable energy to C&I customers at more competitive tariffs. Beyond the Project, the investment is expected to increase competitiveness by supporting a leading RE player in demonstrating the viability of renewable DG to the C&I segment as the government encourages the deployment of broader solutions to help achieve ambitious RE targets.

Financing structure: IFC will provide a long-term and efficient financing structure of up to 16 years that is not readily available in the domestic market. While the credit market in India has observed some growth in FY22, most financiers remain reluctant to increase exposure to long-term infrastructure assets particularly in emerging segments such as DG for C&I. Furthermore, in recent months, monetary policy has tightened and global uncertainty has surged amid fears of an economic slowdown. The debt facility arranged by IFC will enable Fourth Partner Energy to efficiently support a portfolio of assets and better align debt financing to their long-term contractual structure. Resource mobilization: IFC's involvement is expected to facilitate the mobilization of additional funding to support the transaction. As mandated lead arranger for the debt financing package, IFC's participation will signal the viability of the C&I segment and help mobilize funding from parallel lenders by its successful experience investing in RE in India and capacity to support the growing C&I segment. Standard-setting: IFC will provide technical support and guidance to ensure that the Company has adequate capacity to manage E&S risks in accordance with IFC PS. While the client's Environmental and Social Management System is broadly appropriate for the nature and scope of this Project and mostly consistent with IFC PS, IFC will enhance its capacity through measures related to ensuring that relevant land acquisition is in line with IFC PS, developing a Biodiversity Action Plan to ensure net gain for critical habitat species, and assisting the client in implementing a Supplier Code of Conduct with suppliers.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.