IFC, a member of the World Bank Group, has picked up equity stake in Hero Future EnergiesBSE -2.35 %, the renewable energy arm of the Hero Group.
The investment will help the company expand its renewable energy capacity, provide jobs and facilitate private sector development in renewable energy, IFC said in a statement released on Thursday.
IFC, together with IFC Global InfrastructureBSE 0.00 % Fund – a private equity fund managed by IFC Asset Management Company, will invest $125 million in equity that will enable the company to set up 1 GW greenfield solar and wind plants in the next 12 months across India.
“Joining hands with IFC will help Hero Futures achieve a new goal of 2.7 GW renewable energy capacity by 2020, ” said Rahul Munjal, chairman & managing director at Hero Future Energies. At present, Hero Future Energies ha a presence in 12 states in India with a capacity of over 360 megawatts through solar, wind, and rooftop installations.
Sunil Jain, chief executive officer, Hero Future Energies said: “This partnership will fuel our ambitions to tap into the incredible opportunity that lies in both domestic and overseas markets as well as new technologies namely storage, hybrid projects among others. This association is also a validation of our core strengths in timely project delivery, unwavering focus on health safety, stringent asset quality standards and design and engineering skills. We will also aggressively focus on expanding our promising rooftop solar portfolio.”
Over 40 percent of India’s population lacks access to reliable electricity. The country’s growing energy sector will require $250 billion investments over the next five years, most of which will have to come from the private sector. With 80 percent of the country’s energy needs still being met through thermal power, renewable energy is increasingly seen as the solution for bringing universal energy access. In 2014, the government announced a plan of setting up 175 GW of solar and wind energy by 2022.
“With this partnership with Hero Future Energies, IFC is helping accelerate the transition of the renewable energy generation business to the mainstream power sector. Through the Global Infrastructure Fund, IFC is also bringing in the support of international institutional investors,” said Mengistu Alemayehu, regional director, IFC South Asia. “Such a development will boost the confidence of other large business groups and international investors to contribute to India’s ambitious renewable energy targets and make a significant difference in ramping up renewable-energy capacity in the country.”
India is IFC’s top country exposure, globally. IFC’s committed portfolio in India is over $5 billion as of June 30, 2016. In FY16, IFC committed $1.1 billion in new investments in the country.
Source: Economic Times