Vivriti Energy Solutions Debt Fund (VESDF)

Problem Statement – Climate Financing Gap in India

India is at the frontline of the climate crisis. The country is simultaneously one of the largest greenhouse gas emitters globally and among the most vulnerable to climate risks—heatwaves, floods, erratic monsoons, and air pollution already impact livelihoods, health, and food security. Meeting India’s climate commitments (net-zero by 2070, 50% non-fossil capacity by 2030) requires an estimated USD 170–200 billion annually in climate finance, yet current flows are less than one-third of this need.

The financing gap is particularly acute in the mid-market segment:

• Large corporates attract global institutional capital, while early-stage ventures often access VC/PE.

• Mid-sized climate businesses—renewables developers, EV ecosystem players, energy efficiency firms, agri-climate innovators—struggle to access long-term, affordable credit despite being critical to scaling India’s transition.

• Domestic banks remain risk-averse, limiting exposure to newer sectors like e-mobility and climate tech.

• Developmental capital is available but fragmented, with limited structures blending concessional and commercial money.

The result: high-potential, mid-market climate enterprises face a funding bottleneck, slowing down renewable capacity addition, clean mobility adoption, and deployment of climate technologies at scale. Without tailored financing solutions, India risks falling short of its climate and development goals, while missing opportunities for job creation, energy security, and inclusive growth.

The Solution
VESDF is designed to bridge the financing gap for India’s mid-market climate sector by channeling capital into renewables, e-mobility, climate tech, and financial services. These are high-growth sectors critical to India’s low-carbon transition but underserved by mainstream capital markets.

Fund Structure & Mobilization

• Target Size: USD 150 Mn

  • Senior Debt: USD 112 Mn (already secured with in-principle approvals).

  • LP Capital + Sponsor (VAM): USD 38 Mn, currently being raised from developmental and commercial LPs.

• LP Sleeve Returns: Targeting 12%+ in USD (post-tax, hedged, net of expenses) subject to key variables such as hedge cost, leverage cost, and investment performance.

• Launch Timeline: By end of the year, contingent on LP mobilization.

• Capital Recycling: Full corpus will be reinvested at least once during the fund’s tenor, generating a multiplier effect and crowding in additional co-investments from market participants.

Impact & Differentiation

• Detailed impact KPIs defined across each sector and sub-sector to track measurable climate and social outcomes 

• Strong pipeline of investments already identified, ensuring rapid deployment post-launch.

• Optional first-loss concessional capital structure under consideration to enhance risk comfort for commercial lenders and catalyze participation.

Vivriti’s Track Record

• Over USD 225+ Mn invested in climate-aligned sectors to date.

• Proven ability to mobilize global climate capital:

  • Climate bonds from Asian Development Bank.

  • GuarantCo-backed debt in EV and infrastructure.

  • Credit lines from IREDA (India’s renewable financing institution).

• Strong impact reporting framework, with past investments documented through measurable case studies.

Why VESDF?
By combining secured senior debt, catalytic LP capital, and measurable impact, VESDF provides a scalable solution to finance India’s energy transition. It creates a unique opportunity for investors to participate in climate-positive growth while achieving risk-adjusted commercial returns in USD.

Project yet to take off