Hero Future Energies reorganises business to make overseas foray

Hero Future Energies has reorganised its business to expand its portfolio abroad and access cheaper funding. Hero Future Energies (HFE) Global, registered in London since 2016, will control the India business through a Singapore entity and spearhead the global plans.

The renewable arm of BM Munjal Group is looking to get 25-30 per cent of its business from the overseas market. It is looking to make use of the UK treaties with other countries, especially in the African and South Asian region, for efficient financing of projects. The company is yet to have an operational project abroad, though it has participated in some tenders, said a person close to the development.

The move is aimed at exposing HFE Global to better financing avenues in the global market. The company had last year opened branch offices in Singapore and London to expand its presence in close to seven countries, Business Standard had reported in June 2018.

While the company plans to access global financing from the UK and Singapore, its engineering, design and project planning would be handled from the Indian unit, said Rahul Munjal, chairman and managing director, HFE.

Following the KPO model of functioning, all the back-end work of HFE Global would be handled from India. “The idea is to make this a multinational company. Close to 25-30 per cent of our current growth base will come from global markets,” he said. With current capacity of 1.2 Gw of wind and solar power projects, HFE aims to have 5 Gw capacity by 2022.

“Both England and Singapore have good tax treaties with other nations. Being a UK company would help us penetrate these markets easier. Cost of capital is still higher in India for the renewable industry when compared to the West. This (the new structure) would give us access to several financing avenues,” Munjal said.

Following the reorganisation, HFE Global has expanded its board. It has appointed former CFO of Siemens Gamesa Renewable, Andrew Doughlas Hall, the chair audit committee & independent non-executive director. He is the chairperson of UK-based Windhoist, which is a wind turbine installation contractor.

JTC Trust Company (UK) has been appointed the corporate secretary, according to the corporate filings made by HFE in the UK. London-based JTC specialises in corporate and administration services in relation to investment holding and financing vehicles, joint ventures, corporate acquisitions and disposals, and listed vehicles, said the filing.  

HFE, which was launched in 2012, has grown to be the one of the top five renewable companies in the country. Initially into wind power, the company has expanded in solar. The company raised $125 million in January 2017 as equity from International Finance Corporation (IFC), the investment arm of World Bank.

In 2016, HFE issued India's first certified climate bond for expansion of its wind portfolio, through its wind holding entity. The entity secured a funding of Rs 300 crore through issuance of rated and secured non-convertible debentures.