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IFC to invest $125 mn in Hero Future Energies

24 August, 2016

International Finance Corporation plans to make an equity investment of up to $125 million (Rs 840 crore) in Hero Future Energies Pvt. Ltd, the World Bank’s private-sector arm said.

IFC said in a disclosure that it will make the investment together with IFC Global Infrastructure Fund and that the proceeds will be used to fund the construction of solar and wind power plants.

Hero Future Energies is a renewable energy company backed by the Hero Group, a diversified conglomerate in India promoted by the Munjal family. The family fully owns the company through its investment vehicles.

The company develops both solar (grid connected and rooftop) and wind power plants. It plans to commission capacity of more than 1 gigawatt in next 12 months, IFC said.

Hero Group companies include Hero MotoCorp Ltd, India’s biggest two-wheeler maker and auto parts maker Rockman Industries Ltd. The group also has presence in education, IT and financial services sectors.

Hero Future Energies has an operating portfolio of about 260 MW across solar and wind power projects in 10 states in the country, according to its website.

The company has a pipeline of about 1.1 GW of wind projects till 2018-19. In rooftop solar, the company has plans to implement 100-200 MW by 2018-19. The company aims to build a portfolio of 2 GW by 2020, its website shows.

India’s renewable energy sector has seen a lot of activity over the past couple of years after the government set ambitious capacity addition targets. The government aims to achieve 175 GW of renewable power generation capacity by 2022. This includes 100 GW of solar and 60 GW of wind power capacity. India’s renewable energy capacity is currently around 44 GW.

Earlier this year, IFC decided to facilitate debt funding worth around $177 million to Ostro Energy Pvt. Ltd, a renewable energy platform backed by emerging markets-focused private equity major Actis.

The Asian Development Bank, another multinational lender, will lend up to $175 million to Hyderabad-based power producer Mytrah Energy (India) Ltd to fund its wind and solar projects.

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IFC to invest $125 mn in Hero Future Energies

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