International Finance Corporation (IFC), a member of the World Bank Group, has proposed an investment of up $23.9 million in Ganga STP Projects Private Limited, a special purpose company that seeks to provide wastewater treatment in West Bengal, India.
In its disclosure, IFC said the investment includes a subscription to non-convertible debentures of up to Rs 1.047 billion ($14.2 million) and mobilisation of a loan of up to Rs 712 million ($9.7 million) for the special purpose company incorporated by VA Tech Wabag Limited, a Chennai-headquartered pure-play water technology firm that focuses on water treatment for municipal and industrial users.
Ganga STP has created a wastewater treatment facility through the Howrah Sewerage project in the Kolkata Metropolitan Development Authority (KMDA) area in West Bengal, India. The project has an estimated total cost of Rs 4.176 billion ($56.8 million).
IFC said the project will provide wastewater treatment amidst growing pollution of rivers due to lack of treatment capacity in the country.
“The project could help promote market competitiveness by supporting an innovative HAM (hybrid annuity model) structure in the wastewater sector in India as the government attempts to create bankable structures to encourage private sector participation,” IFC said.
HAM is a popular type of public-private partnership that has been used in India for roads and is being attempted in other sectors.
With the proposed investment, IFC said it will be supporting a reputable water sector-focused domestic sponsor and will contribute to the creation of more efficient and sustainable assets and promote private sector investments.
In addition, IFC will provide support to the company in implementing the necessary measures to manage environmental and social risks according to IFC’s Performance Standards.
The project’s sponsors are Wabag and KWMPL, a portfolio company of the Green Growth Equity Fund. The fund invests in scalable operating companies and platforms across renewable energy, energy efficiency, energy storage, e-mobility, resource conservation, and associated value chains in India.