Raj Pai

Managing Partner


GEF Capital Partners

Investor Type: PE Growth investor in low to mid-market companies operating in the climate thematic space.   
Year Founded:
Office located in Mumbai, India 
Geo Focus:
South Asia
Target Sectors:
climate mitigation, adaption and circular economy strategies

For the past decade, GEF Capital Partners has invested in environmentally sustainable projects. Can you describe how the firm’s investment opportunities have evolved during this time? What attracted you to making these investments in India? Also, how have GEF Capital Partners’ investment strategies and priorities shifted over time?  

Several of the senior members of GEF Capital Partners’ South Asia team have been investing in the region for well over a decade in mid-market, growth companies, focused on climate and sustainability sectors. Over that period, the number and scale of companies operating in climate mitigation, adaptation and circular economy has grown substantially. According to the World Bank today this represents a USD1t+ financing opportunity in the region.  

India’s favorable domestic policies have established it as an appealing investment destination for environmentally sustainable ventures in various sectors, such as the renewable value chain, energy efficiency, food & agriculture, e-mobility, water & sanitation and sustainable building materials. This has expanded the universe of investable opportunities for GEF. 

GEF Capital Partners’ investment strategies and priorities have shifted over time. In the Climate 1.0 phase (2011-2016), the focus was primarily on climate mitigation themes, including renewable independent power producers (IPPs), energy efficiency projects and water treatment segments. In the Climate 2.0 phase (2017-2022), additional themes emerged, such as climate adaptation, food security and electric vehicles. The renewable sector also expanded to include equipment manufacturing and allied sectors within the value chain. Currently, in the Climate 3.0 phase, the climate sector has further expanded, with emerging opportunities in circular economy themes, climate-tech solutions and sustainable materials. 

In 2019, GEF Capital Partners raised nearly USD200m for its South Asia Growth Fund II focused on climate mitigation, adaptation, circular economy and resource efficiency. Can you provide some examples of companies in India the fund is targeting? 

The fund targeted specific arenas, focusing on high-quality and high-growth ventures. 

In the field of climate mitigation, the fund invested USD27m in 2021 in Premier Energies, a leading solar cell and modules manufacturer in India. India has plans to add over 20 gigabytes (GB) of solar energy each year, positioning itself as one of the world’s largest growth markets in solar energy as part of its Net Zero objectives. 

Within climate adaptation, the fund made an investment in 2020 in Seedworks (see GPCA Deal Case), a climate-smart agricultural company. Through its research and development efforts, Seedworks catalyzes increased resiliency in hybrid seeds for rice, vegetables and cotton crops. 

Recognizing the significant impact of supply chains on carbon emissions, the fund focused on supply chain decarbonization. In 2021, it invested USD15m in 3SC, a venture that utilizes smart digital solutions and climate technology to reduce carbon footprints within supply chains. 

Lastly, the fund supported electric mobility solutions, aiming to reduce the carbon footprint of the transportation sector and contribute to global climate change mitigation efforts. In 2022, the fund invested USD25m in Electra EV, India’s leading electric vehicles powertrain solutions company, and USD17.5m in Hero MotoCorp, the world’s largest manufacturer of two-wheelers, in 2023. 

In 2022, GEF Capital Partners made its first exit from Prince Pipes and Fittings, a major PVC pipe manufacturer and multiple polymer processors in India, after initially investing in the company in 2019. Please describe the path to exit and share something about the acquirer. Why was this an attractive opportunity for them? 

Prince listed on Indian bourses soon after GEF’s INR1.06b (~USD27.7m) investment in 2019. We played a crucial role in enhancing the ESG framework and corporate governance practices of the company during the investment period. Scaling up of earnings with 27% year-over-year revenue growth coupled with healthy multiple expansion driven by better governance and ESG standards resulted in a multi-bagger exit for the fund. GEF exited the investment through the systematic sale of shares in the market through market trades and block trades for an estimated value of INR4.6b (~USD62.1m) in 2022. Prince Pipes has a key role in the critical arena of water conservation, rainwater harvesting and in providing piping solutions to irrigation and plumbing applications. 

Please describe how GEF Capital Partners collaborates with management at its portfolio companies to measure their environmental impact. How does the firm work with companies to build climate and sustainability metrics? Please share examples of what you are seeking to measure. 

GEF works closely with portfolio companies on ESG initiatives, ensuring compliance with national regulations and global frameworks like IFC Performance Standards, TCFD, UN PRI, Sustainable Development Goals and Impact Principles. Post-investment, we provide support for capacity building, hire specialized ESG personnel and conduct training. All portfolio companies are required to submit quarterly reports on their ESG performance. Some of the list ESG and Impact KPIs tracked by the fund for portfolio companies include: 

  • • Amount of Energy Consumed
  • • Percentage Reduction in Energy Consumption
  • • Percentage Reductions in GHG emissions
  • • Net GHG Emissions Avoided
  • • Amount of Water Consumed
  • • Amount of Wastewater Treated/Recycled
  • • Percentage Reduction in Raw Water Consumption
  • • Percentage of Waste Diverted Away from Landfill
  • • Number of Accidents/Loss Time Incidents
  • • Number of Women Employees
  • • Number of Jobs Created

From your perspective, how would you describe the current policy and regulatory environment in  India for the sectors you are investing in? 

India’s emergence as one of the fastest-growing large economies in the world over the past decade can be attributed to its stable and pragmatic policy and regulatory environment. Reforms such as the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC), and Online Business Registration and other digital initiatives have been implemented to simplify processes, reduce bureaucracy, enhance transparency and create a more conducive business environment. 

The favorable policy landscape in India extends to climate investment, with the government implementing various policies and schemes across sectors. As part of its ambitious goals, India aims to achieve 450 gigawatts (GW) of renewable energy capacity by 2030, thereby fostering growth in the clean energy value chain and allied sectors. 

Additionally, the government has introduced initiatives like the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which encourages the adoption and production of electric vehicles. 

The favorable regulatory and policy conditions in India have also been beneficial for the manufacturing sector, with programs like China Plus One Strategy, Production Linked Incentive (PLI) Scheme and Make in India providing tailwinds for the sector.