Remarks by George Deikun, USAID/India Mission Director at “Emerging Business Opportunities & Venture Capital Finance, New Delhi

April 26, 2007

Good morning Dr. Ramaswami, Dr. Srivastava, Dr. Mor and Dr. Hammond. The past few years have seen dramatic changes in the pace and direction of economic and industrial growth in India and increasingly investors are looking at opportunities in the country. The reasons for India's emergence as a top-drawer investment destination are clear. India’s robust economic growth and stable political and legal system paired with low manufacturing costs and its emergence as a hub for innovation make it attractive to potential investors.

We are here today to focus on investments in clean technologies and sustainable enterprises and the opportunities for this sector in India. Around the world there has been a shift toward investments in green products and technologies. Sectors such as bio-fuels, batteries and fuel cells, solar photovoltaic modules, clean coal and smart grid technologies are of interest to investors. India is no exception to these trends.

What drives innovation in sustainable and green technologies? Ultimately, bottom line improvements for businesses and consumers help to push these innovations. The desire to reduce energy costs and conserve natural resources has helped sustainable products in some sectors to grow at a higher rate than their traditional counterparts. The high cost of energy leads consumers to energy efficient appliances. Deforestation is opening up opportunities for environmentally sound “certified wood” and other wood substitutes. Organic farming is making in-roads to address poor soil fertility. Flood irrigation and other water inefficient practices are giving ground to alternative technologies such as no-till irrigation.

The U.S. Agency for International Development has a long history of promoting innovation within the energy and environment sectors. USAID has worked for years with the public and private sectors to promote market-based energy efficiency services, accelerate renewable energy development and advance the development of clean technologies. The New Ventures, India partnership with World Resources Institute (WRI) and the Confederation of Indian Industry(CII) -Green Business Center is supporting innovations in sustainable small and medium businesses that will help protect and restore the environment while creating a more prosperous society. WRI is one of the leading environmental and clean energy policy and business advocacy organizations in the U.S. And, the CII-Green Business Center has become a center of excellence in India for energy efficiency and green business.

Opting to support innovation in the small and medium business sector was not by chance. Small and medium businesses make up close to 60% of the India’s GDP and employs more than 70% of the population. This represents a tremendous opportunity to advance sustainable and green enterprises.

New Ventures, India supports sustainable enterprises by accelerating the transfer of capital to companies that incorporate social and environmental benefits. The program aims to create a pipeline of profitable, and environment friendly enterprises. Over the next few years, New Ventures, India will create a universe of investors, business leaders, partner organizations, government organizations, and sponsors which will support the program and its goals.

The New Ventures, India team has been working with finalists from the 2006 investment cycle. Companies have undergone mentoring and training and participated in an Investor Forum. Several investors are now conducting due diligence on the New Ventures portfolio and the 2007 investment cycle has begun with an overwhelming response. By the end of 2008 New Ventures India will have invested over $15 million in equity in at least 20 companies.

In the coming months, New Ventures India will also help to establish a green equity fund in India. Experience over the past year indicates that most candidate businesses are seeking investments in the range of $ 500,000 to $ 4 million. This segment is not well served in the market. Angel Investors in India look at investment levels for small and medium businesses of up to $ 1 million, and venture capital funds scout for a minimum level of $ 5 million. The green equity fund would look to serve this underserved market segment.

Our goal for this program is that it become self sustainable and that we help to catalyze investments in a significant number of green businesses. Our advice to interested businesses is that they analyze the environmental and social impact of their product or service and put in place system to monitor these impacts. Businesses also need to consider their managerial capacity to manufacture the innovation, market it and sell it.

The U.S. Government is proud to be associated with the New Ventures, India program. Global investments in sustainable development are reportedly around $ 300 billion with 95% of these investments taking place in developed countries. To direct a greater proportion of these investments to emerging economies such as India requires careful planning and creativity. We are confident that New Ventures, India will help to connect green and sustainable enterprises with investments and help to build a better future for the world.

Thank you.