When the Green Climate Fund approves an equity investment, the goal is not simply to provide capital — it is to change the terms on which private finance enters the climate space. By absorbing early-stage risk and demonstrating the viability of climate-focused businesses in developing countries, GCF's equity instruments are designed to unlock far greater volumes of private investment than would otherwise be possible.

Nowhere is this approach more visible than in India, where GCF's investment in the Avaana Capital Sustainability Fund II (project SAP037) is supporting four frontier technology-driven startups that are each solving a different piece of the climate puzzle — from grid-scale energy storage and high-performance and sustainable packaging to energy resilience in electric mobility and  resilient food systems and feed supply chains. These companies are applying deep tech innovation build commercially viable solutions that transform foundational sectors of the economy to drive environmental, developmental and economic impact at scale.

Equity as a catalyst for private climate finance

GCF's approach to equity investment reflects a fundamental insight: that in many developing country markets, early-stage climate enterprises lack access to the patient, risk-tolerant capital they need to prove their models and attract mainstream investors. Grants are often too small and too short-lived; commercial loans arrive too late, when risk has already been absorbed by others. Investment is needed at the very early stage of technology development to help innovators turn their ideas into a business - and also to then capitalise those small businesses and bring breakthrough ideas to market.

Equity fills those gaps. As part of its broader strategy to mobilise private capital, GCF structures equity investments to de-risk innovation and generate the performance track record that subsequent investors require. A single equity commitment can catalyse repeated climate benefits as proven technologies are replicated, licensed, and deployed at scale across markets and geographies — what Rajeev Mahajan, Manager in GCF's Department of Strategic Investment Partnerships and Co-Investments, describes as "a powerful impact multiplier."

The Avaana fund, accredited through SIDBI with Avaana Capital as executing entity, exemplifies this model. GCF's investment channels capital to innovators and to micro, small and medium enterprises (MSMEs) in India that are building proprietary, IP-led technologies with the potential to unlock large climate outcomes. These companies have the scientific depth and commercial expertise to create scalable, resilient enterprises - but need patient backing to get there. These are ventures applying frontier innovation to complex problems in energy, mobility, materials, and resource efficiency — with the potential to drive not only environmental outcomes, but long-term economic value creation and global competitiveness.

The Avaana Capital Sustainability Fund II is a SEBI-registered venture capital fund with a target size of US$120 million, investing in early-stage companies across three thematic sectors: energy and resource management, mobility and supply chains, and sustainable agriculture and food systems. Its investment philosophy focuses on backing frontier technologies and innovation-led companies that deliver impact across climate mitigation, adaptation, and resilience, generate large-scale developmental outcomes and drive systems-level transformation across core sectors of the economy such as energy and mobility, supply chains and food systems. This approach aligns with India’s need to transition to low-emissions growth pathways while strengthening resilience in key sectors and safeguarding its most vulnerable communities. GCF approved an equity contribution of US$24.5 million to the fund that also includes co-investment from the UK India Development Cooperation Fund, SIDBI, and domestic institutional and private investors.

Four startups, four climate solutions

The fund has already made investments in MSMEs, and its portfolio continues to grow. Here are some of the investments that have already been made, and how they are driving climate tech investments.

AmpereHour Energy is building intelligent, resilient, future-proof energy infrastructure through advanced Battery Energy Storage Systems (BESS). The company uses advanced power electronics, control algorithms, and grid-integration software developed in-house to create full-stack, battery chemistry–agnostic modular energy storage systems that are flexible, cost-efficient, and scalable from mid-scale distributed assets to utility-scale deployments. With GCF-backed capital, AmpereHour is expanding its storage capacity from 50 megawatt-hours to 1 gigawatt-hour — enabling deeper integration of renewables, reducing reliance on fossil-fuel peaker plants, and improving grid resilience across the region. Its proprietary energy management software extends battery life, reduces Levelized Cost of Storage (LCOS), and enables faster, more efficient deployments, while positioning  the company to scale through licensing – thereby multiplying impact well beyond its initial footprint.

AmphereHour's commissioned energy storage systems have collectively displaced millions of litres of diesel consumption, avoided thousands of tonnes of CO₂ emissions, and delivered significant fuel cost savings for customers - accelerating India's transition to cleaner, more cost-competitive energy infrastructure.

Dharaksha Ecosolutions is addressing the plastic packaging problem from an unexpected direction: mushroom mycelium and agricultural residue. Through careful material science R&D — controlled mycelium growth, formulation chemistry, and process optimisation — Dharaksha produces packaging that is fully biodegradable, more protective and durable than conventional styrofoam, and manufactured from crop waste that would otherwise be burned in fields. Through its innovations, Dharaksha is lowering costs in biomanufacturing, unlocking efficiencies that make sustainable packaging commercially viable at scale. Their process uses agricultural stubble as feedstock, transforming what was once a pollution hazard into a valuable raw material, driving a regenerative circular economy. Operating at the intersection of biotechnology, industrial engineering, and advanced manufacturing, the company  is proving there is no need for a tradeoff between sustainability and performance. Their approach simultaneously addresses plastic pollution, air quality, and agricultural residue management, with strong potential for IP licensing to manufacturers across the region.

By replacing Styrofoam with high-performance biodegradable packaging and converting agricultural stubble into a valuable feedstock, Dharaksha addresses GHG emissions on two fronts - eliminating fossil fuel-based materials from supply chains while curbing burning-related emissions and the release of black carbon, a climate pollutant estimated to be up to 5,000 times more potent than CO₂ over a 20-year horizon.

Tsuyo Manufacturing is building the electric drivetrain capacity that India's mobility transition requires. The company designs and manufactures EV powertrains — motors, controllers, and notably, rare-earth-free motor technologies that reduce dependence on constrained global supply chains. Tsuyo's engineering capability spans electric three-wheelers, cars, buses, heavy vehicles, and diesel-to-electric retrofits. By developing proprietary drivetrain architecture, the company is positioned both to serve India's surging EV market and to licence its technology internationally as the electric mobility sector scales.

Motors and controllers are critical components that drive energy efficiency, thermal performance, and system reliability across automotive and industrial applications, and are critical for electrification of the economy. With 29 patentable innovations, Tsuyo’s indigenous, scalable and vertically integrated powertrain platform has the potential to define India’s role in enabling resilient supply chains worldwide.

Beyond direct GHG abatement through diesel-to-electric transition, Tsuyo addresses India's deep import dependence on motor and controller technologies by building indigenous manufacturing capability in a segment long dominated by Chinese imports — while its ICE-to-EV retrofit kits lower the capital barrier to electrification for informal transport workers and MSMEs, and its climate-resilient motor design and real-time diagnostics platform strengthen both asset-level reliability and grid resilience as electrification scales across the economy.

Tsuyo recently received a patent for its first-of-its-kind dual inverter-based open winding motor architecture - a significant step forward in India’s industrial and automotive electrification journey. This proprietary architecture dynamically toggles between power configurations based on demand, optimising energy delivery in real time. This results in improved energy efficiency, performance flexibility, and reduced system stress across EV applications. Tsuyo’s approach exemplifies the kind of indigenous, scalable, IP-led innovation that will strengthen India's energy transition and drive the creation of a resilient and globally competitive powertrain ecosystem.

Wastelink is closing a loop that most food supply chains leave open. By connecting food surplus streams and the animal feed industry, Wastelink is turning food waste into high-value, standardised feed ingredients. In India, food waste is measured in millions of tons and feed demand continues to surge. Wastelink supports food suppliers with a structured, scalable, and compliant pathway to manage surplus responsibly, while for feed manufacturers, it delivers a cost-effective and reliable input that boosts yields and strengthens feed supply chain resilience. The core of Wastelink’s solution is its AI-enabled platform, which integrates intelligent reverse logistics with advanced food science formulation. This produces ECOMIX™ - a traceable, performance-tested compound feed input that delivers consistent nutritional quality. The result: over 35,000 tonnes of food waste diverted annually, methane emissions avoided, and feed provided for approximately 38,500 animals - while the core team continues advancing the underlying feed science and circular-economy methodology.

By diverting tens of millions of kilograms of food surplus away from landfills and transforming it into high-value animal feed, Wastelink has prevented hundreds of millions of kilograms of CO₂-equivalent emissions, reduced water consumption at scale, and unlocked significant economic value from waste — demonstrating that circular food systems can deliver measurable environmental and commercial returns simultaneously.

Scaling solutions, not just companies

What these four companies share — beyond GCF's backing — is a deliberate focus on developing high-quality, defensible innovation that can scale well beyond the Global South. Each has built the kind of scientific and engineering capability that supports licensing, replication, and partnerships beyond their immediate markets. This is precisely the model GCF's equity strategy is designed to support: early capital that enables R&D-led enterprises to mature to the point where they can attract commercial finance, expand independently, and eventually attain large-scale implementation that in turn generates climate impact that compounds over time.

For GCF, the Avaana investment illustrates the potential of equity as a tool for systems change in developing countries — providing early, patient capital to de-risk innovation, crowd in private investment, and accelerate the transition from breakthrough research to large-scale implementation.