Private equity giant KKR and Hero Group said on Tuesday they have agreed to invest $450 million in the company’s renewable energy arm Hero Future Energies (HFE).
The investment is aimed to expand HFE’s renewable energy capacity and capabilities across technologies such as solar, wind, battery storage, and green hydrogen, and into new markets over time.
Founded in 2012, Hero Future Energies is a leading independent power producer in India with a diversified portfolio of 1.6 GW of operating solar and wind projects. Its wholly owned subsidiaries include Hero Wind Energy Pvt Ltd, Hero Solar Energy Pvt Ltd and Hero Rooftop Energy Pvt Ltd.
“With this investment, Hero Future Energies will work to accelerate India’s energy transition and contribute to the Indian government’s target of generating half the country’s power from non-fossil fuel sources by 2030,” Hero Future Energies chairman and managing director Rahul Munjal said.
KKR has made the investment from its Asia Pacific Infrastructure Fund. 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 December 31, 2021.
In 2020, KKR set up Virescent Infrastructure, a renewable energy platform to own and operate renewable assets in India. In 2022, KKR launched Aster Renewable Energy, a renewable platform to develop, build and operate solar, wind, and energy storage projects in Taiwan and Vietnam, with a view to expanding to other markets across the region.
The investment is for a significant minority stake but comes with significant governance rights that would make KKR a co-promoter along with founder chairman and managing director Rahul Munjal, ET reported in August.
The investment comes at a time when India is targeting to expand renewable energy capacity, reduce carbon emissions by 1 billion tonne by 2030 and achieve net zero emissions by 2070. Some of India’s homegrown startups in the sector include Fourth Partner Energy, ReNew Power, CleanMax Solar and Azure Power.