The UAE’s Masdar recently acquired a 20 percent stake in India’s Hero Future Energies for $150 million, the Indian media reported. Hero Future Energies is an Indian renewable energy firm valued at $750 million.
Masdar is Abu Dhabi’s leading renewable energy firm, also known as Abu Dhabi Future Energy. The renewable firm is owned by the UAE government’s sovereign wealth fund Mubadala Investment.
Hero Future Energies will use the $150 million funding toward expansion of its renewable energy portfolio in select international geographies. It hopes that 25 percent of its growth will stem from new international markets such as the UK, Bangladesh, Singapore, Vietnam, the Philippines and Indonesia.
The deal comes at a time when credit opportunities for renewable firms have declined. Major lenders such as State Bank of India have reduced funding options for projects selling power less than Rs.3 per unit.
India and the UAE have been developing their relations on the energy front. The UAE is the third largest trade partner and the fourth largest crude oil exporter for India. Rahul Munjal, chairman and managing director of Hero Future Energies, said in a statement, “Hero Future Energies and Masdar are ideal long-term strategic partners. We have clear alignment in our core ambitions. We are committed to advancing the development, commercialisation and deployment of cutting-edge renewable power solutions.”
The deal is reported to be the second strategic funding in Hero Future Energies since International Finance Corporation’s (IFC) investment in 2017. IFC, a sister organisation of the World Bank had invested $125 million in the Indian renewable firm.