We always describe deals with numbers. How many millions of dollars we invested, the expected financial return, the number of people that will be reached and so on. We do this because that’s how capital is allocated. It is how we measure success or failure; it is the common language we speak across the board table and in investment committee meetings.
But numbers only tell you so much.
That’s why I wanted to tell you about my journey with Ayana. It started in 2017. I was sitting in our offices in Bengaluru trying to work out how to fix a problem on energy generation which was showing good signs of prospects in India. It was clear that CDC, as we were called back then, could play an important role in driving the adoption of renewable energy in India. We looked at almost every small to mid-size platforms in the country to see if we could back an existing business, but we kept running into the same obstacles: either valuations were too high or management had differing ambitions to ours.
So alongside the team in India, we took the decision that we needed to take a more radical approach and create our own platform – an investment vehicle complete with its own management team and independent Board and also focus on the low income states of India that would demonstrate to the world that it needed to get behind the Indian renewables story.
BII has created several platform businesses since then – but back in 2017, the idea was a radical departure for a development finance institution. This involved grasping a whole industry and giving it a good shake to radically accelerate its development. And we would be doing it in India – our largest single market where the risks of getting it wrong didn’t bear thinking about.
It took over close to six months to persuade the BII Board of the merits of the idea. But we got there. Ayana Renewable Power was established in 2018 as a 100 per cent subsidiary of BII with an initial investment of $100 million.
From the outset, Ayana was committed to creating a positive social impact alongside its business goals. For nearly every solar site, Ayana launched a programme – the first of its kind – focused on building vocational skills for people, especially women, in townships around the solar park. The first one was in Andra Pradesh with funding support provided by DFID. This model was later replicated across other sites, empowering local communities and creating a lasting legacy beyond energy generation.
To ensure strong governance, we took the unique step of constituting a full Board ahead of hiring the CEO or forming the full senior leadership team. Under the strong chairmanship of Dr. P.J. Nayak, a highly respected figure in the financial and corporate world, a full Board with three independent Directors was set up to provide strategic guidance and oversight from the very beginning. This was a critical decision that laid the foundation for Ayana’s success. It took almost a year before the CEO Shiv joined the company.
With the leadership team in place, Ayana began bidding for greenfield projects, adhering to the strict guardrails set by the Investment Committee (IC). Given the nascent stage of the sector, the initial focus was on projects with central power purchase agreements (PPAs), solar parks with no land acquisition risks, assured connectivity, and minimal EPC risks. This cautious approach paid off, and Ayana successfully secured 500 MW of capacity, nearly exhausting the initial $100 million capital.
As Ayana grew, it became clear that the renewable energy business is a capital-intensive endeavour. To achieve the ambitious targets we had set, we needed to bring in additional investors with deep pockets and expertise in infrastructure project implementation.
The outcome was a game-changer: we secured c$500 million in funding from a consortium of investors, including the National Infrastructure Investment Fund (NIIF), sponsored by the Government of India, and the Green Growth Equity Fund, backed by the UK government and NIIF. This infusion of capital allowed Ayana to scale up its operations significantly.
By 2023, Ayana had achieved a significant scale, with over 4GW of renewable energy capacity under development and operating. The company was not only powering millions of homes but also driving India’s transition to a low-carbon economy.
And this year, Ayana was sold to new owners with the deep pockets required to take the company to its next stage.
On a personal level, the story of Ayana is not about the numbers. It was a journey of discovery and imagination for me and also for BII. It showed us at our very best: creative, willing to take risks and determined to execute to turn a transformative idea into a business that helped to shape an entire industry. That took the commitment of colleagues from right across BII to establish a business that placed the highest E&S standards and level of corporate governance at the heart of its operations.
Those standards will remain within Ayana now that we have successfully exited the business – a decision that allows for commercial capital to continue to fuel the expansion of the company. The decision also means we can recycle the proceeds of our investment into new and exciting ventures that will move the dial in our efforts to meet the monumental challenge of the climate emergency.
We have demonstrated that a DFI can go beyond its traditional role of just providing capital. And today, the ability to do that has never been more important. As BII continues to focus on frontier markets, we can draw upon the example of Ayana as a proof point that we can achieve incredible things as individuals and as an organisation by making bold decisions that recognise that numbers in a spreadsheet will never give us the whole story.
As we look to increase our efforts to build new platform businesses, I am confident that BII has the creativity, imagination and energy as well as the capital required to make a real difference in the world.
Srini Nagarajan shares BII’s vision for creating the Ayana renewable energy platform in India.
