The Venture Capital Fund for Energy Efficiency (VCFEE), established by the BEE, is one of the financial instruments under the Framework for Energy Efficient Economic Development of National Mission for Enhanced Energy Efficiency (NMEEE). The VCFEE provides risk capital support to EE investments in new technologies, goods and services. The Government of India has approved about INR 2.1 bn for the VCFEE. The fund, led by the VCFEE fund manager, aims to create significant volumes in EE deal flow through advertising and soliciting opportunities in the energy efficiency sector. Energy Service Companies (ESCOs) and companies that plan to undertake EE projects through energy performance contracting are targeted as key potential beneficiaries of the VCFEE. The fund is registered with the Securities and Exchange Board of India under its Alternative Investment Funds Regulation (2012). In its first phase, the VCFEE will focus the allocation of its equity capital to energy efficiency projects in Government buildings and Municipalities.
The fund will invest in the form of equity.
A single investment by the fund shall not exceed INR 20 million.
The fund shall provide last mile equity support to specific energy efficiency projects, limited to a maximum of 15% of total equity required via Special Purpose Vehicles (SPV) or INR 20 million, whichever is less.
The duration of the fund will be 10 years from the date of commencement.