The International Finance Corporation has invested $125 million of equity in a family-owned renewables developer in India, providing the funds to build 1GW of wind and solar plants over the next 12 months.
The IFC investment in Hero Future Energies comprises equal contributions of $62.5 million from its own account and the IFC Global Infrastructure Fund, a private equity vehicle run by IFC Asset Management.
The New Delhi-based developer, which is controlled by the Munjal Family through conglomerate Hero Group, aims to grow its renewables portfolio to 2.7GW by 2020. It now has a combined capacity of over 360MW in solar and wind across 12 states in India, as well as 1.4GW of projects in the pipeline.
The partnership is designed to help the developer tap opportunities in both domestic and overseas markets, as well as new technologies covering storage and hybrid projects, said Sunil Jain, chief executive of Hero Future Energies. “We will also aggressively focus on expanding our promising rooftop solar portfolio,” he added.
The size of IFC’s equity stake in the company was not disclosed. IFC declined to comment.
With 40 percent of India’s population lacking access to reliable electricity, the country’s energy sector is estimated to require $250 billion of investment over the next five years, most of which will have to be sourced from the private sector, according to IFC. The Modi administration has set a target of building 175GW of solar and wind plants by 2022.
IFC has been investing in Indian renewables since 2009. its advisory team is currently helping with the development of a 750MW solar project in the state of Madhya Pradesh, which stands to become the world’s largest single-site solar facility once operational.
In 2016, the institution committed $1.1 billion of new investments in the country. Its Indian portfolio totalled more than $5 billion as of 30 June 2016.