HFE signed an agreement with IFC for the investment, the proceeds of which will be used to fund the construction of wind and solar power plants
Hero Future Energies (HFE) has raised US$ 125 million in equity infusion from International Finance Corporation (IFC), the World Bank’s private investment arm. HFE signed an agreement with IFC for the investment, the proceeds of which will be used to fund the construction of wind and solar power plants of HFE; E&Y was the transaction advisor to HFE.
IFC in a statement said that the investment of $125 million in equity will enable the company to set up 1 GW of Greenfield solar and wind plants in the next 12 months across India.
The deal between IFC and HFE comes at a time when the Modi government has set a target for renewable energy generation of 175 gigawatts by 2022.
“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 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 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 power portfolio.”
“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.”
Rahul Munjal speaking to Saur Energy said that HFE’s projects will have a significant impact on rural India.
Mercom Capital recently its report forecasted the solar installations to reach over 9 GW in 2017 which would put the Indian solar sector in the big leagues along with China, the United States, and Japan. However, research firm states there are significant headwinds in terms of transmission and evacuation issues that could threaten the pace of growth.