Non-banking financial company (NBFC) Clix Capital has signed a $20 million loan from the Global Climate Partnership Fund (GCPF), a Luxembourg-based impact investing fund managed by responsAbility Investments AG. The funding will be earmarked for sustainable projects that help to mitigate climate change.
GCPF is a public-private partnership fund that finances renewable energy and energy efficiency projects across several developing and emerging nations, both directly and indirectly. The infusion of sustainable and green funds will further fortify Clix Capital's lending portfolio and solidify its commitment to sustainability.
With a reported 122 per cent year-on-year (YoY) surge, Clix Capital claimed it had recorded Rs 12.06 billion as its highest-ever quarterly fundraise since its inception. The company's core book assets under management (AUM) marked a 43 per cent YoY growth, and profitability witnessed a 534 per cent YoY increase.
Speaking on the announcement, Rakesh Kaul, MD and CEO of Clix Capital, said, "As climate change mitigation becomes a cross-policy agenda globally, our efforts are aligned to advance sustainable and green lending. As a responsible lender, we are committed to supporting India's green journey via credit support and assisting businesses with CO2 reporting, green lending development, and environmental and social risk management initiatives."
Clix Capital offers a range of lending solutions, including secured and unsecured MSME loans, healthcare equipment and mortgage finance, and K-12 school financing. It was co-founded by Pramod Bhasin and Anil Chawla in 2016 through the acquisition of the lending and leasing business of GE Capital.
AION Capital Partners Limited, a private equity fund affiliate of Apollo Global Management, LLC, backs Clix Capital. Apollo Global Management is an alternative investment managers globally with AUM of $513 billion.
David Diaz Formidoni, Head of Financial Institution Investments, Climate Finance at responsAbility stated that Clix Capital provides much-needed credit support to India's MSMEs in healthcare, education, and other sectors. "Coupling its expertise in providing credit to unbanked businesses with our mission to promote renewable energy and energy efficiency investments, we are poised to support a transformation in India's sustainable development landscape. Together, we hope to power eco-conscious entrepreneurs, drive innovation, and create a greener future," he added.
According to the ' Getting India to Net Zero ' report, India requires a budget of over $10 trillion to become a net zero-emission nation by 2070. However, only one-fourth of its green finance requirements are currently being met.
This highlights the urgent need for a multi-fold increase in climate funding from various stakeholders. A competitive tax regime, cross-sector policy support, and progressive green guidelines are three key imperatives to drive green investments.
responsAbility Investments AG is an impact asset manager specialising in private market investments across three investment themes to directly contribute to the United Nations Sustainable Development Goals (SDGs): Financial Inclusion, to finance the growth of Micro and SMEs; Climate Finance, to contribute to a net zero pathway; and Sustainable Food, to feed an ever-growing population sustainably. Its investment solutions target specific, measurable impact alongside market returns.
Since its inception in 2003, responsAbility has deployed over $13 billion in impact investments. With over 200 employees collaborating across seven offices, as of 1 March 2023, it has managed $4.8 billion in assets across approximately 280 portfolio companies in 74 countries.
The GCPF, managed by responsAbility Investments AG, was established by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), KfW Entwicklungsbank and the International Finance Corporation (IFC) in 2009 as a public-private partnership. BMWK, the Department for Energy Security and Net Zero (DZNEZ)of the UK, provides Junior catalytic capital, Denmark's development cooperation (Danida).
Other private and public investors include ASN Bank, Ärzteversorgung Westfalen-Lippe, FMO, OeEB, Sparkasse Bremen, the European Investment Bank (EIB), and Heilsarmee. It focuses on financing energy efficiency and renewable energy projects, through local financial institutions or directly. Only projects that generate significant energy savings and pledge to reduce projected greenhouse gas emissions by at least 20 per cent are eligible for funding.