Hero Future Energies Global (HFE), the clean energy arm of Hero Group, will invest around $200 million in a solar project in Rajasthan. The project will be supported by 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 step-down subsidiary of HFE.
HFE is a leading renewable energy developer in India and currently has an installed capacity of more than 1.2 GW and is in the process of implementing around another 1 GW. The company proposes development, construction, operation and maintenance of a 250 MW solar farm located in Bhadla, 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 mobilization 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.
The Hero Group, promoted by the Munjal family, is one of the leading industrial conglomerates in India. The group’s main operations have historically been in automotive manufacturing and auto ancillaries, with Hero MotoCorp as its flagship entity.
The Munjal family owns a majority stake in the HFE Group. IFC and its Global Infrastructure Fund (GIF) had each invested $62.5 million in the renewable energy company.
HFE’s Chairman and Managing Director is Rahul Munjal, the eldest nephew of the Hero group chairman Pawan Munjal. Sunil Jain, the CEO of HFE, has 30 years of experience in the renewable energy sector.