IFC, FE Clean Energy to invest $50m in Indian power

The investors will acquire an 11% interest in Bhilwara Energy and the capital infusion will be used to fund power projects in India and Nepal. The two firms will invest $25m each in the Indian operator and developer of power production plants.

International Finance Corporation (IFC), the private investment arm of the World Bank, and energy-focused private equity firm FE Clean Energy will invest INR2.3 billion (€39.5million; $49.7 million) for a 10.8 percent stake in Bhilwara Energy (BEL), which is a part of the LNJ Bhilwara Group.

Bhilwara Energy:
$50m injection
from IFC and
FE Clean Energy

The two firms will invest $25 million each in the Indian operator and developer of power production plants, BEL said in a statement.

Following the completion of the transaction, which will take the form of a share issue purchase by IFC and FE Clean Energy, the total foreign interests in BEL will increase to 17 percent. Other private equity investors in the company include Jacob Ballas and WIH Holdings, which together invested INR1.05 billion in BEL in 2007.

The fresh capital will be used to fund the company's power projects that are in various stages of implementation. “Current fund raising will help the company to attract other strategic investors and partners for its growth plans in the future,” Ravi Jhunjhunwala, chairman of Bhilwara Group, said in a statement. “Funds will mainly be utilised for power projects in India and Nepal in the next few years,” which it aims to do through the development or acquisition of green field projects.

BEL is the principal holding company for all the power ventures of the Bhilwara Group. The company currently has an 86 megawatt operating project and a 192 megawatt hydro power project targeting completion by next month. Additionally, the company also holds a 51 percent equity stake in Malana Power Company, a joint venture with Norway’s SN Power; an indirect 44.9 percent holding of AD Hydro Power and a 51 percent stake in power consultancy firm Indo Canadian Consultancy Services, a joint venture with RSW of Canada. 

Bhilwara Group's core interests lie in textiles, graphite electrodes and power.

Private equity firm FE Clean Energy made this investment through India Clean Energy III, a Mauritius-based fund. The firm currently manages more than $400 million for investments in the clean energy sector in emerging markets. The firm is headquartered in Connecticut and has offices in Bangkok, Singapore, Warsaw, Budapest and Mexico City.