Green Business Attracts Rs. 100 Crores Investment From Venture Capitalists

Thursday, April 26, 2007

There is a need to get a structured plan in a sustainable ecological mode to attract venture capitalists to India, said Dr. Nachiket Mor, Chairman, New Ventures India Steering Committee and Deputy Managing Director, ICICI Bank at a seminar on “Emerging Business Opportunities in India and Venture Capital Finance”.

Dr. Mor also announced Rs.100 crore investment towards the innovation and development of green businesses in India.

“The burden of climatic changes will be borne by the developing countries, therefore opening up a huge market for green business and the market of clean energy is going to double by 2015”, he said.

India has to maintain its GDP growth to become a developed country and green businesses have lot of growth potential for Indian economy, he added.

India offers a great opportunity for investors who can take risk, invest and take initiative and the current economical growth provides the right pace for venture funding to innovative projects, said Dr. T Ramasami, Secretary, Department of Science and Technology, Government of India.

Innovation holds the key to the growth of economy in the globalised economy, he added. India’s venture capital structure will depend on the existing knowledge economy based on identification, evolution and marketing of the right knowledge, mentioned Dr. Ramasami.

He said that technology ventures have superimposed on the capital ventures in the current economic scenario as patents, technologies and innovations have become intangible asset. This attributes to higher growth opportunities, he added.

Dr. Ramasami said, “the growth of industrial sector possesses environmental challenges and investment in green technology can benefit the whole world as much as the specific customers”. Venture capitalists should focus on the youth power that has access to the knowledge and technology and has hugely contributed to the growth of economy and innovation, he added.

India has technology and business capability that can address the challenges of growth. The single biggest challenge is to create an eco-system for the bottom of the economic pyramid, Dr. Ramasami said. The other challenges of venture funding in India are the lack of bigger investment and non-existence of angel venture capitalists. Bank of Angels has been created to fund the initial ventures and provide the seed money to upcoming entrepreneurs, he added.

Dr. Ramasami also released an IFC report on ’The Next 4 Billion’, which talked about the market size and business strategy for four billion low-income people at the base of the pyramid (BoP). , “The report stimulates the business environment to provide a large access to the market that has a lot of social implication”, Dr. Allen L Hammond, Vice President for Innovation, World Resource Institute and author of the report said on the occasion.

He mentioned that the investors need market information and the report provides a comprehensive outlook, the buying behavior of 4 billion low-income people who constitute more than 70% of the world population.

India aims at creating a pipeline of profitable and environment-friendly enterprises through New Ventures, said George Deikun, Mission Director – USAID India, American Embassy. He said, “over the next few years, this initiative will create a universe of investors, business leaders, partner organizations, government organizations and sponsors which will support the program and its goals.”

New Ventures India’s goal is to achieve at least 15 million dollars worth of investments in 20 sustainable and green businesses by 2008. These include areas of green building materials, energy efficiency products and services, renewable energy and water products, said Deikun.

He said that green technology is highly promoted by the US and in India also the partnership between CII and World Resources Institute looks promising.

The green equity fund will look at underserved markets with a focus on SMEs in India and 95 percent of investments are done in developing countries, mostly India, Brazil and China. He also added that India needs careful planning and creativity to successfully execute the upcoming green business projects.

CII – Godrej GBC aims at creating India as one of the global leaders in green businesses and India has leadership potential in green technology in the cement, paper, green buildings and renewable energy sector, said S Raghupathy, Senior Director and Head CII – Sohrabji Godrej Green Business Center (Godrej GBC).

Raghupathy mentioned that ’New Ventures India’ started by CII – Godrej GBC is already facilitating 10 projects and would like to scale-up its operation for which new projects and entrepreneurs are being invited.

L K Singhvi, Ex. IRS and Sr. Executive Director, SEBI said that the challenge for the venture capitalists would be to involve creativity with the growth that can be inclusive as well as sustainable. There are lots of difficulties in creating venture capital funds and policy should be framed accordingly to create an environment to encourage investment by venture capitalists, he mentioned.

Source: New Kerala (link opens in a new window)