Private equity firm FE Clean Energy and International Finance Corporation (IFC) are investing $50 million (Rs 230 crore) in Bhilwara Energy Limited (BEL) for a 10.8% stake.
The deal values the Noida-based firm at around $465 million or Rs 2,130 crore. It is part of the LNJ Bhilwara Group which has diversified presence across power, electrodes and textile. The funds will be used for investing in projects in India and Nepal by Bhilwara Energy, which operates hydel power assets.
FE Clean, though India Clean Energy Fund, and Washington-based IFC are investing $25 million each. Bhilwara has earlier raised funding from Jacob Ballas Capital managed New York Life Investment Management India Fund II LLC and WIH Holdings (part of Wachovia).
Other LNJ Bhilwara Group companies HEG Limited (electrodes) and Rajasthan Spinning and Weaving Mills Ltd (textile) hold 28.90% and 19.51% respectively in BEL before current round of dilution. The balance is held by the promoters directly.
''The rationale behind the stake dilution is to fund our power projects under different stages of implementation. Current fund raising will help the company to attract other strategic investors and partners for its growth plans in the future. Funds will mainly be utilised for power projects in India and Nepal in the next few years,” said by Ravi Jhunjhunwala, Chairman, LNJ Bhilwara Group.
“India Clean Energy believes in the potential of Bhilwara Energy. We believe that BEL has one of the strongest management teams in the power business in India and has demonstrated track record of conceptualizing and implementing large hydro projects on a merchant power sale basis,” said Anand Prakash, Director India Clean.
FE Clean has also invested Bangalore's Soham Renewable, which also has hydel power assets. The firm invests in emerging markets clean energy sector and has $400 million under management. IFC has invested in several renewable energy firms like Auro Mira and Azure Power.
Bhilwara Energy aims to have power generation capacity of 2,500 MW by 2017 in the renewable sector. It currently operates Malana Power Company Ltd, an 86-MW project in Himachal Pradesh, along with SN Power. Bhilwara Energy also has AD Hydro Power Ltd, a 192-MW project in Himachal Pradesh, being jointly developed by Bhilwara Energy and SN Power of Norway.
Apart from AD Hydro, BEL is also developing three other hydro power projects - two in India and one in Nepal. These projects will be located in Arunachal Pradesh and Punjab in India and the Himalayan terrain of Nepal.
Besides hydel power assets, the group is also planning a foray in areas like geothermal and solar energy. The group has signed an MOU with Iceland-based Mannvit for development of geo-thermal projects in India and Nepal.
LNJ Bhilwara Group also has a presence in power consultancy through ICCS, a joint venture with RSW Canada, a world leader in power consultancy.