Renewable energy firm Hero Future Energies announced raising USD 125 million from International Finance Corp (IFC) for expanding its clean power generation capacities. IFC is picking up equity stake in the company at an investment of USD 125 million, Chairman and Managing Director of Hero Future Energies, the renewable energy arm of Hero Group, Rahul Munjal told reporters here.
However, Munjal did not disclose the quantum of minority equity stake to be given to IFC.
He said the investment will help the company expand its renewable energy capacity, provide jobs and facilitate private sector development in renewable energy. IFC, together with IFC Global Infrastructure Fund, a private equity fund managed by IFC Asset Management Company, will invest USD 125 million in equity, enabling the company to set up 1 GW of greenfield solar and wind plants in the next 12 months across India.
“I am happy to join hands with IFC in our endeavour to achieve new goal of 2.7 GW renewable energy capacity by 2020,” said Munjal.
In the backdrop of falling solar tariff due to lower cost of borrowing and cheaper equipment, he opined that the reasonable solar tariff should be in the range of Rs 4-4.3 per unit. At present, Hero Future Energies has a presence in 12 states with a capacity of over 360 MW of solar, wind, and rooftop installations. With 80 per cent 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 Indian government announced a plan of setting up 175 GW of solar and wind energy by 2022. IFC’s India Lead, Climate Business and Infrastructure, Shalabh Tandon said this partnership will speed up transition of clean energy business to mainstream. He was of the view that through the Global Infrastructure Fund, IFC is also bringing in the support of international institutional investors.
IFC is a pioneer in renewable energy in India, investing in the sector since 2009. Its portfolio companies have set up over 3 GW of different forms of renewable power projects in the country. India is IFC’s top country exposure globally. IFC’s committed portfolio in India is over USD 5 billion as of June 30, 2016. In 2015-16, IFC committed USD 1.1 billion in new investments in the country.