SCALE UP RENEWABLE CAPACITY IN INDIA
IFC Invests in Hero Future Energies to Significantly Scale Up Renewable Capacity in India
New Delhi, India, January 5, 2017—IFC, a member of the World Bank Group, is picking up equity stake in Hero Future Energies, 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, together with IFC Global Infrastructure Fund, a private equity fund managed by IFC Asset Management Company, will invest $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 endeavor to achieve new goal of 2.7 GW renewable energy capacity by 2020” said Rahul Munjal, Chairman & Managing Director, Hero Future Energies. Currently, Hero Future Energies has a presence in twelve states in India with a capacity of over 360 megawatt having solar, wind, and rooftop installations.
Sunil Jain, Chief Executive Officer, Hero Future Energies commented, “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 and environment standards, developmental capabilities, 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 in 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 Indian 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 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 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.”
IFC is a pioneer in renewable energy in India, investing in the sector since 2009. Our portfolio companies today have set up over 3 GW of different forms of renewable-power projects in the country. IFC’s advisory team is helping the state of Madhya Pradesh set up a 750-MW solar-power project in Rewa, which will be the largest single-site solar plant in the world when completed.
“The IFC Global Infrastructure Fund is pleased to partner with the Hero Group in the renewables space in India,” said Darius Lilaoonwala, Co-Head, IFC Global Infrastructure Fund. “We look forward to supporting Hero Future Energies as it further consolidates its market position as a leading Indian wind and solar energy platform over the next few years.”
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. In addition to strengthening local capital markets in India, IFC is focused on boosting financing in infrastructure and logistics, promoting financial inclusion, helping create conditions to attract increased private capital, and helping structure public-private partnerships.