The IKEA Foundation and Climate Policy Initiative today announce they will join forces to launch a project preparation facility which will support productive use renewable energy (PURE) companies in India to raise the capital they need to grow.
Renewable energy companies in India need capital to grow and reach more people. There are available sources of finance, but accessing loans and investments can be complex and costly for fledgling companies, creating a barrier to growth.
Climate Policy Initiative (CPI) will bring together renewable energy companies and lenders to streamline credit application process and expand available capital. By helping companies meet lenders’ requirements, CPI aims to unlock USD 15-17 million in finance for renewable energy products and services to improve people’s livelihoods.
“PURE has a major role to play in India’s energy transition by enabling access to clean energy and generating livelihoods through the PURE initiative. Specifically in non-urban areas, but is yet to realize a small fraction of its potential,” said Dhruba Purkayastha, CPI’s India Director.
The facility will be set-up to support a range of productive use renewable energy companies, such as rural productive use appliances and off-grid solar applications (pumps, cold storage, among others). CPI already has a pipeline of more than 30 PURE companies and more companies will be supported throughout the project period, especially if the facility adds other donors. The facility is estimated to leverage 10-15x: using an initial USD 1.5 million grant, the program is estimated to mobilize USD 15- 17 million in commercial loans and private investment.
The PURE Facility is loosely modeled on a previous CPI program, USICEF, which supported 47 solar power projects, which went on to mobilize 30x in commercial debt over the initial grants provided. The PURE facility will support companies across India, but will focus on rural areas without stable electricity connections.
The PURE facility is part of the IKEA Foundation’s greater mission to help people in rural areas transform their livelihoods and afford a better life for their families, while protecting the planet from greenhouse gas emissions.
About Climate Policy Initiative
CPI is an analysis and advisory organization with deep expertise in finance and policy. Our mission is to help governments, businesses, and financial institutions drive economic growth while addressing climate change. CPI has six offices around the world in Brazil, India, Indonesia, the United Kingdom, and the United States.
Learn more at: www.climatepolicyinitiative.org
About IKEA Foundation
The IKEA Foundation is a strategic philanthropy that focuses its grant making efforts on tackling the two biggest threats to children’s futures: poverty and climate change. It currently grants more than €200 million per year to help improve family incomes and protect the planet from climate change. Since 2009, the IKEA Foundation has granted more than €1.5 billion to create a better future for children and their families.
In 2021 the Foundation decided to make an additional €1 billion available over the next five years to accelerate the reduction of Greenhouse Gas emissions.
Learn more at: www.ikeafoundation.org
Rob Kahn (CPI)
Altaf Makhiawala (IKEA Foundation)