SAN FRANCISCO: The Innovations arm of the California Clean Energy Fund announced that it is investing $3 million in cKers Finance’s Sustainable Energy Bond issuance for India. These bonds are a new and innovative instrument, incubated by the India Innovation Lab for Green Finance in 2017, that allow impact investors to finance sustainable energy assets exclusively, as well as track the impact of their capital on an ongoing basis.

Making the announcement at the Global Climate Action Summit, Danny Kennedy, Managing Director of CalCEF shared “We are excited to partner with cKers Finance which has taken on a market-making role in India for several emerging sustainable energy segments. We hope to spread the work we have done in California, as highly risk tolerant seed investors in clean energy entrepreneurship, to jumpstart other clean energy markets globally.”

The proceeds of the bonds will primarily be used to scale-up newer models that accelerate decentralized solar segments. These include the nascent pay-as-you-go models in India for residential and commercial solar systems, solar pumps, and off-grid solar for micro/mini-grids segments. Part of the proceeds will also be invested in the emerging ESCO (energy service company models) that promote energy efficiency.

“This issuance keeps us on track to reach our near term $40m goal.  A unique feature of these bonds is that they are viable at issuance sizes of $2-5m, which is unlike large green bond issuances which are usually larger than $50m. We have made that possible by standardizing processes and building an ecosystem of partners to support this”, shared Pawan Mehra, Director and CIO of cKers Finance.

Both CalCEF and cKers Finance have been working to accelerate clean and sustainable energy by architecting appropriate financial interventions for the space with support from the US-India Catalytic Solar Facility Program, a collaboration between India’s Ministry of New and Renewable Energy, the David and Lucile Packard Foundation, the William and Flora Hewlett Foundation, the John D. and Catherine T. MacArthur Foundation, and the Jeremy and Hannelore Grantham Environmental Trust.

“This innovative transaction necessitated development of the right structure and the ClimateWorks Foundation has been instrumental in helping us evolve the same”, added Christina Borsum, Chief Financial Officer of the California Clean Energy Fund.

“India has set ambitious targets for solar energy, with distributed solar alone accounting for 40 GW by 2022. Through its Sustainable Energy Bond, cKers Finance can facilitate the flow of private capital in this market, and we hope that more institutions and developers start to use this framework,” shared Shilpa Patel, Director of Mission Investing at the ClimateWorks Foundation.

The impact reporting measures of the bond have been designed with support from the India Innovation Lab for Green Finance. The methodology for measurement of impact and its attribution has been developed by the sustainability advisory firm, cKinetics.