America's DFC to invest $350 million in India

Kolkata: The US International Development Finance Corporation (DFC) is looking to invest $350 million in India to support multiple projects in the country’s financial services sector, health infrastructure, renewable energy and food security space.

DFC, known as America’s development bank, has approved loans worth $142 million for ReNew Power and $50 million for Sitara Solar Energy to build and operate solar power plants in Rajasthan, $50 million for Northern Arc Capital to scale up lending to businesses that expand access to water, sanitation, and food or advance women’s economic empowerment, besides committing to invest in several other projects.

These are part of DFC’s $1 billion commitment approved by its board to firms enaged in developmental works across in Africa, Latin America and other emerging markets. The investments mark one of the largest tranches approved during a board meeting, DFC said.

“The projects have a particular focus on development impact, with nearly 60 per cent of investments in low- and lower middle-income countries,” DFC said in a statement from Washington, adding that the investments are aimed at supporting financial services for women, small businesses, and other underserved groups at a time when capital is in desperate need.

“These projects will uplift some of the most underserved communities around the world,” DFC chief executive officer Adam Boehler was quoted as saying a statement. “The impact of these projects will be particularly meaningful as the world continues to fight the health and economic fallout of the pandemic.”

Northern Arc chief executive Kshama Fernendes expects to receive the funding in the second quarter. "It's a long term facility and hence very valuable. Fernendes said, adding that interest rate is "very attractive".

The funding agency has committed up to $20 million to buy equities in delivery app Freshtohome, which envisaged a project to support over 1,500 farmers and fishermen throughout the country; and up to $30 million investment in South Asia Growth Fund II to support businesses in the energy, water, and food sectors. It has also lined up a $27.3 million loan for Paryapt Solar Energy to build and operate a 50-megawatt solar power plant in Gujarat. It has offered $14.6 million loan guarantee to World Business Capital to enable it to support the expansion of Avanse Financial Services’ student loan program.

DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world.