Home Hedge Funds KKR leads $450 mn investment in Hero Group’s renewable energy arm

KKR leads $450 mn investment in Hero Group’s renewable energy arm

The investment in Hero Future Energies builds on KKR’s extensive experience in India and the renewables sector.

MUMBAI: Global private equity (PE) major KKR will invest $450 million, or around 3,585 crore, in Hero Future Energies (HFE), the renewable energy arm of the Hero Group, the companies announced on Tuesday.

“This investment will position HFE for continued growth and support its efforts to expand its renewable energy capacity and capabilities across technologies such as solar, wind, battery storage, and green hydrogen, and into new markets over time,” a statement said.

The majority investment comes from KKR along with co-investment from parent conglomerate Hero Group, details of which along with the valuation remain undisclosed.

US-based investor KKR makes its investment from its maiden Asia Pacific Infrastructure Fund raised last year with a record $3.9 billion. It followed up this year with a $17 billion Global Infrastructure Fund, that exceeded the initial $12 billion target.

The investment in Hero Future Energies builds on KKR’s extensive experience in India and the renewables sector.

Since 2011, KKR has deployed over $15 billion in equity globally to invest in renewable assets, such as solar and wind, which have an operational power generation capacity of 23 GW, as of 31 December 2021, the company said.

KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds.

In Asia Pacific, KKR sees renewables as core to its infrastructure strategy and seeks to capture the significant opportunities across the region. In 2020, it had set up Virescent Infrastructure, a renewable energy platform to own and operate renewable assets in India.

This year, KKR launched Aster Renewable Energy, a renewables platform to develop, build and operate solar, wind, and energy storage projects in Taiwan and Vietnam, with a view to expand to other markets across the region.

“Hero Future Energies is a pioneer in India’s renewables sector, and has a strong track record of delivering innovative clean energy solutions to support India’s renewable energy ambitions. HFE’s clean energy solutions play an important role in helping companies decarbonise as energy demands continue to grow,” said Hardik Shah, Partner at KKR.

Founded in 2012, Hero Future Energies is a leading independent power producer in India with a portfolio of 1.6 GW of operating assets across utility and commercial and industrial sectors.

The independent power producer is present across multiple states in India, Bangladesh, Vietnam, Singapore, Ukraine and the UK. It plans to invest progressively in grid connected solar and wind, rooftop sectors, energy storage and green hydrogen over the next few years in India and internationally.

“KKR’s investment will drive Hero Future Energies’ growth in the rapidly growing renewable energy markets domestically and globally, as well as in new technologies such as battery storage, solar-wind hybrid projects, round-the-clock power, and green hydrogen, among others,” said Srivatsan Iyer, Global CEO of Hero Future Energies.

Besides Hero Group, World Bank’s private investment arm International Finance Corporation (IFC), Masdar – also known as Abu Dhabi Future Energy Co., which picked up 20% stake for $150 million in November 2019.

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