KKR, Hero Group to invest $450 million in Hero Future Energies

U.S.-based private equity giant KKR and Hero Group have agreed to invest $450 million in Hero Future Energies (HFE), the renewable energy arm of the Hero Group.

This investment will position Hero Future Energies 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, the two entities said in a statement.

Through its range of solutions, Hero Future Energies will also look to support companies in their efforts to decarbonise and transition towards sustainable energy sources to achieve their net zero emission goals, the statement said.

Founded in 2012, Hero Future Energies is an independent power producer (IPP) in India with a diversified portfolio of 1.6 gigawatt (GW) of operating solar and wind projects.

The deals advances the country's efforts to expand renewable energy capacity, reduce carbon emissions by 1 billion tons by 2030 and achieve net-zero emissions by 2070, as energy demand continues to grow alongside economic development.

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, says Rahul Munjal, chairman and managing director of Hero Future Energies.

Private sector participation, including from global investors, is expected to be a key enabler for India to meet these targets, in lockstep with supportive government policies.

"HFE's clean energy solutions play an important role in helping companies decarbonize as energy demands continue to grow. We look forward to working closely with HFE's management team and existing investors, including the Hero Group and IFC, to help HFE achieve its next phase of growth and contribute to the energy transition efforts in India and globally," says Hardik Shah, partner at KKR.

KKR makes its investment from its Asia Pacific Infrastructure Fund. 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 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.