Fourth Partner Energy Secures $275 Mn Investment From IFC Consortium

Fourth Partner Energy Secures $275 Mn Investment From IFC Consortium

International Finance Corporation (IFC), Asian Development Bank (ADB) and DEG today made a $275 Mn investment into Fourth Partner Energy (FPEL). IFC is a global impact investor and DEG is a German investment and development company. The consortium’s investment will infuse capital to fund FPEL’s business expansion plans which include a target portfolio of 3.5 GW of renewable energy assets by 2026. The latest investment takes the stake of investors in Fourth Partner Energy to 90%, leaving ghe founders with the balance 10%.   

FPEL, an Indian renewable energy solutions provider, has an installed base of 1.5 GW of green assets and is set to commission the first phase of its maiden 575 MW wind-solar hybrid project under the ISTS (Inter State Transmission System) route, in Karnataka, later this quarter.

Announcing the closure of fund-raising, Vivek Subramanian, Co-Founder, and ED, Fourth Partner Energy said, “Our investors and lenders keep coming back as financiers because FPEL prioritises commercial viability and robust returns while focusing on scaling the business. We welcome IFC, ADB, and DEG as new partners to join our existing high-quality equity investor base comprising Norfund and TPG. Fourth Partner Energy is now poised to transform the region’s clean energy landscape and assist more businesses in reaching their RE100 goals in a just, equitable manner.”

World Bank’s IFC leads the consortium with an investment of $125 Mn, while ADB is infusing $100 Mn and Germany’s DEG is at $50 Mn to complete this round of fundraising. “Reducing the energy sector’s carbon footprint is critical to realizing India’s green ambitions. FPEL is pioneering innovative, future-ready renewable energy solutions, including battery storage, hybrid renewables, floating solar, and bifacial technology. Our investment will help FPEL to expand its renewable energy offerings and increase the supply of affordable, clean energy for commercial and industrial consumers across the country. Strategic investments in distributed generation through corporate PPAs are creating a new asset class, key to diversifying India’s energy mix. Together with our partners, we aim to support India’s green transition and make a meaningful impact on the country’s sustainable energy journey,” added Imad N Fakhoury, IFC’s Regional Director for South Asia.

India’s renewables sector is expected to attract an annual investment of $25 Bn through 2030, aided by the government’s clarity and stability in RE policy. The C&I (Commercial and Industrial) consumer segment has been rapidly scaling up and attracting significant investments in this space.

“For ADB, investing into FPEL includes $70 Mn from our ordinary capital resources and $30 Mn from Leading Asia’s Private Infrastructure Fund 2 (LEAP 2), administered by ADB. Providing commercial and industrial users in India with access to clean and renewable energy will foster growth of the sector while helping to achieve net-zero emissions,” said Suzanne Gaboury, ADB Director General for Private Sector Operations. “We expect that ADB’s investment will support the clean energy transition by encouraging domestic and international lenders to engage with independent power producers in this sector.”

Monica Beck, Member of DEG’s Managing Board believes time is apt to contribute to India’s ambitious renewable energy development goals. “We are delighted to be part of FPEL’s important growth journey, together with our partners IFC and ADB. FPEL combines rapid growth in building a solar and wind park portfolio with the high demands of first-class clients and can thus be a driver of CO2 reduction and energy transition in India” she added.

FPEL is currently developing additional capacities of 1.2 GW of open access projects across Maharashtra, Uttar Pradesh, Tamil Nadu, and Gujarat; while continuing to focus on ISTS, on-site solar, and battery storage as key business verticals. The firm has 2,000 projects commissioned for over 300 marquee clients including Walmart, Unilever, Skoda, Hyundai, Tata Motors, Linde, Akzo Nobel, Ultratech Cement, Heidelberg, TCS, and Wipro.

“The Climate Investment Fund aims to accelerate the global energy transition through renewable energy investments in emerging markets. Fourth Partner Energy is a good example, delivering well on climate solutions for businesses. We are pleased to welcome strong investors such as IFC, ADB, and DEG, and look forward to collaborating on enabling further expansion of renewable energy in India, added Anders Blom, Vice President at Norfund. Norfund is the single largest investor in FPEL till date, having invested nearly $145 Mn into Fourth Partner Energy, through 2 rounds in 2021 and 2023.