UAE-Based Masdar Backs India’s Hero Future Energies with $150 Million Investment

Hero Future Energies aims to increase its renewable capacity to 5 GW by 2022


In a significant development for the domestic renewable industry, the United Arab Emirates-based Masdar has invested around $150 million (~₹10.7 billion) in Hero Future Energies, one of the leading names in the clean energy space in India.

This is the second such strategic investment in HFE since 2017, when an investment of $125 million (~₹8.94 billion) was made by the International Finance Corporation (IFC), which is an arm of the World Bank.

The investment is expected to pave the way for the expansion of Hero in India and other key markets. It is notable that Masdar, the renewable energy arm of Mubadala, has a rich history of successful partnerships and has delivered projects in more than 25 countries since 2006. The total investment made by Mubadala comes to around $13.5 billion (~₹962.2 billion) to date.

Hero Future expects that around 25% of its growth will come from Europe and the U.K., and Asia–including Bangladesh, Singapore, Vietnam, Philippines and Indonesia, and this investment is expected to facilitate its expansion in these regions.

Speaking on the latest development, HFE chairman and managing director, Rahul Munjal, said, “HFE and Masdar are ideal long-term strategic partners. We have clear alignment in our core ambitions. We are committed to advancing the development, commercialization, and deployment of cutting-edge renewable power solutions. We are delighted that the renewable energy arm of Mubadala has decided to invest in the renewable energy arm of the Hero Group to support HFE’s global expansion plan and our aspiration to be a premier global clean-tech company providing solutions to the enormous challenges posed by climate change”.

Established in 2012, Hero Future Energies is a part of the Hero Group, and the current portfolio of the company includes 1.3 GW of wind and solar power. The company is aiming to increase its capacity to 5 GW by 2022. Along with solar and wind energy, the company is also planning to develop new projects using new technologies, which include battery storage and floating solar projects.

Recently, Mercom reported that Masdar was set to acquire a minority stake in Hero Future Energies Global Ltd. (HFE UK), and Hero Future Energies Private Ltd (HFE India) according to a notification issued by the Competition Commission of India.

According to Mercom’s India Solar Project Tracker, HFE India currently has 600 MW of large-scale solar projects in operation, and about 840 MW of projects are in the development pipeline as of June 2019.

In April this year, the International Financial Corporation had offered Clean Solar Power, a step-down subsidiary of Hero Future Energies Global Ltd., a debt financing of up to $43.3 million (~₹3.1 billion) for the development of a 250 MW greenfield solar project located in Rajasthan’s Bhadla. The estimated cost of the project was $200 million (~₹14.3 billion).

According to Mercom Capital Group’s recently released 9M 2019 Solar Funding and M&A Report, the total corporate funding (including venture capital/private equity, public market, and debt financing) in the first nine months (9M) of 2019 was up with $9 billion raised, compared to $6.7 billion that was raised in the same period last year, a 34% increase year-over-year (YoY).