Bank of America expects $10b in India green deals in 2023

Bloomberg

India could attract close to $10 billion in renewable energy investment in 2023, a bright spot as public markets remain largely shut to big-ticket capital raising, according to Bank of America Corp’s top executives in the country.
Deals and investments will continue to flow into areas such as electric vehicles and green hydrogen, Kaku Nakhate, the lender’s president and India country head, said in an interview, as investors look to reflect the energy transition in their portfolios.
“If you really have to get your ESG story right, and if you are into energy, then you can do large pieces of work in India,” Nakhate said.
Sectors such as renewable energy and retail are set to benefit as India pulls ahead of emerging market rivals in attracting overseas investors. Even as dealmaking globally has been hit by rising interest rates and market volatility, the South Asian nation’s geopolitical stability helps position it for greater inflows.
Investors and companies attending the bank’s recent North American roadshow were impressed by the Indian government’s clear targets to achieve net zero carbon, Nakhate said.
“People take us seriously,” she said. “That’s why we are seeing more sustainability funds that want to invest in India.”
The bank will continue to build out its distressed debt financing business in the renewable energy sector, which has generated double-digit returns, she said.
Along with green investment, Nakhate predicts an increase
in dealmaking in consumer brands, which are supported by rising per capita income and spending.
“If you want to play the India story, you will want a mix of brands to enjoy the distribution story,” Nakhate said.
The bank also expects India to benefit from so-called friend-shoring by companies that are rethinking their supply chains, disrupted by Covid and the Ukraine war, Nakhate said. India, with its democratic traditions and robust domestic markets, is well suited to attract this capital, Nakhate said.