Hero Future Energies and IFC to Invest $243.3 Mn in Rajasthan Solar Project

The project will be supported by the World Bank’s  International Finance Corporation (IFC), which will invest around $43.3 million (Rs 300 crore).

Hero Future Energies Global (HFE), the clean energy arm of the Hero Group has revealed its plans to invest close to $200 million (Rs 1404 crore) for its latest solar project in Rajasthan. The company currently has an installed capacity of more than 1.2 GW and is in the process of implementing around another 1 GW. The company

The project will be supported by the World Bank’s  International Finance Corporation (IFC), which will invest around $43.3 million (Rs 300 crore). The project will be developed by Clean Solar Power (Jodhpur), a subsidiary of HFE.

Hero Future Energies, a leading renewable energy developer in the country has planned for the development, construction, operation and maintenance of a 250 MW solar farm located in Bhadla Solar Park in Rajasthan. The solar farm will sell power to Solar Energy Corporation of India Limited (SECI) pursuant to a 25-year Power Purchase Agreement (PPA).

Total estimated project cost is approximately $200 million and IFC investment involves a debt financing of up to $43.3 million to the company and mobilisation of senior loans on best efforts basis, said the World Bank’s investment arm.

“IFC will provide fixed interest rate local currency loan with long term maturity of up to 20 years which is not easily available in the market. This will improve project viability against any adverse interest rate fluctuations. Moreover, longer tenor loans can help increase the overall competitiveness of the project,” said IFC.

In January we reported that Asian energy producers including Petronas of Malaysia, Masdar and Singapore’s Sembcorp were in separate discussions to acquire a minority stake in Hero Future Energies.

Abu Dhabi’s Masdar Clean Energy entered into exclusive talks to acquire a 30-35% stake in Hero Future Energies. The renewable energy arm of the Munjal family’s Hero Group has been looking for a strategic investor to back the company’s expansion into global markets. It targets raising $300-350 million from the stake sale at a valuation of over a billion dollars.