India and the United Kingdom decided to set up a 240 million pound fund to finance clean energy projects here, Finance Minister Arun Jaitley said on Tuesday.
The Green Growth Equity Fund will be a sub-fund of NIIF.
"We have established the NIIF. Our first major step in the fund has been taken and there is going to be a sub-fund. With the NIIF participating in it, this is going to be a Green Growth Equity Fund where both are going to make a contribution of 120 million pounds and this will be financing the energy needs in India," Jaitley said.
India had in 2015 set up the Rs 40,000 crore National Infrastructure and Investment Fund (NIIF) to finance greenfield as well as brownfield projects.
"This is going to be the first a major beginning as far as the fund is concerned," Jaitley said while addressing the media after the 9th India-UK Financial Dialogue.
During the meeting between Jaitley and the visiting UK Chancellor of the Exchequer Philip Hammond, both countries reaffirmed their commitment to invest up to 120 million Pound each in the joint fund which aims to raise around 500 million pound.
The fund will focus initial investments in India's rapidly growing energy and renewables market and a "fund manager would be selected by autumn".
"Progress will be accelerated by starting the process of appointing a fund manager now with early market engagement via the publication of a blueprint with the aim to identify additional and complementary sectors for fund investments," said the joint statement after the meeting of the two ministers.