Alternative investment major KKR said Tuesday it has signed an agreement to co-invest $450 million in Hero Future Energies (HFE), the renewable energy arm of the Hero Group, along with the Indian conglomerate.
Although a bulk of the money is expected to come from KKR, the PE firm did not give a breakup of the contribution.
KKR said this investment will support HFE’s strategy 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.
Founded in 2012, HFE has a diversified portfolio of 1.6 GW of operating solar and wind projects. It already counts International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, as a shareholder. It is present across multiple states in India, Bangladesh, Vietnam, Singapore, Ukraine and the UK.
Hardik Shah, Partner at KKR, said that Hero Future Energies 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 decarbonize as energy demands continue to grow.”
Srivatsan Iyer, Global CEO of Hero Future Energies, said KKR’s investment will drive the company’s 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.
KKR will invest from its Asia Pacific Infrastructure Fund. The PE firm said its investment in HFE builds on its 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 December 31, 2021.
In Asia Pacific, KKR sees renewables as core to its infrastructure strategy and seeks to capture the significant opportunities across the region. 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 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.
Last month, KKR rolled out a $520-million infrastructure investment vehicle in India for roads.