Hero Future Energies (HFE), the renewable energy firm of the $6 billion conglomerate Hero Group on Thursday (January 05) raised $ 125 million in equity infusion from the International Finance Corporation (IFC) - the private sector investment arm of the World Bank - and the IFC Global Infrastructure Fund
Hero Future Energies (HFE), the renewable energy firm of the $6 billion conglomerate Hero Group on Thursday (January 05) raised $ 125 million in equity infusion from the International Finance Corporation (IFC) - the private sector investment arm of the World Bank - and the IFC Global Infrastructure Fund.
HFE signed an agreement with IFC for the investment, the proceeds of which will be used to fund the construction of solar and wind power plants of HFE. As part of the deal, IFC will have a minority stake in the renewable energy firm. However, the stake of IFC was not disclosed.
Pawan Munjal, Chairman, Managing Director & Chief Executive Officer, Hero Moto Corp said, “This marquee deal with the International Finance Corporation will empower us to take advantage of the potent ecosystem.”
Rahul Munjal, Chairman & Managing Director, Hero Future Energies, said, “Since our inception in 2012, HFE has been funded by the family. In this rapidly evolving sunrise industry, where targets are getting increasingly ambitious, partnering with like-minded institutions with complementary skill set is the future. I am happy to join hands with IFC, in our endeavour to achieve a new goal of 2.7 GW renewable energy capacity by 2020. ”
When asked about the disbursement of the fund in the wind and solar sector, Rahul Munjal said that 60-70 per cent of the new fund will be infused in expanding solar operations and the remaining in our wind energy portfolio.
In February 2016, HFE had raised Rs 300 crore through so-called certified climate bonds to expand its wind portfolio. Climate bonds or green bonds are an asset class linked to climate change solutions.
Sunil Jain, Chief Executive Officer, Hero Future Energies commented, “This association is also a validation of our core strengths in timely project delivery, unwavering focus on health safety & environment (HSE) standards, developmental capabilities, stringent asset quality standards and design and engineering skills. We will also aggressively focus on expanding our promising rooftop solar portfolio.”
Mengistu Alemayehu, Regional Director, IFC South Asia said, "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."
Huge advances have been made in the past few years to achieve India's ambitious renewable energy targets of adding 175 GW of renewable energy, including addition of 100 GW of solar power, by the year 2022.
Power generation from renewable energy sources like solar and wind has increased to 7.54 per of the total electricity generated in the country during April-September this fiscal. The total installed capacity from various renewable energy sources in the country as on October 31, 2016, is 28,279 MW from wind, 8,728 MW from solar, 4,997 MW from bio-power and 4,323 MW from small hydro power.