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Fourth Partner Energy raises $125 mn from Norfund and TPG Capital’s RISE Fund

Fourth Partner Energy s now strengthening its onsite and offsite solar presence in the subcontinent; as well as key markets across South and Southeast Asia. (Photo: Bloomberg)Premium
Fourth Partner Energy s now strengthening its onsite and offsite solar presence in the subcontinent; as well as key markets across South and Southeast Asia. (Photo: Bloomberg)

  • Fourth Partner Energy is building solar parks in Uttar Pradesh, Maharashtra and Tamil Nadu. The new funds will be raised for business expansion in domestic and international market

NEW DELHI: Norway’s state-owned Norfund and TPG Capital’s RISE Fund have invested $100 million and $25 million respectively in Hyderabad-based Fourth Partner Energy (4PEL).

Fourth Partner Energy focuses on commercial and industrial (C&I) segment and has an operational portfolio of 550 megawatt (MW).

Mint had reported in September last year about the company appointing Investec to raise about $150 million through a stake sale. Fourth Partner Energy is building solar parks in Uttar Pradesh, Maharashtra and Tamil Nadu. The new funds will be raised for business expansion in domestic and international market.

“Hyderabad-based Fourth Partner Energy today announced that it had raised $125 Mn in equity funding from Norwegian Investment Fund – Norfund and existing shareholder The Rise Fund, TPG’s global impact investing platform. This $100 Mn marks Norfund’s maiden investment into India’s leading solar energy company, while The Rise Fund is investing an additional $25 Mn into Fourth Partner, following its $70 Mn investment in July 2018," the companies said in a joint statement on Wednesday.

This comes in the backdrop of distributed renewable energy generation attracting strong investor interest as the market has few developers with large portfolios. C&I projects are generally insulated from risks such as power procurement curtailment and tariff-shopping by state-owned distribution companies. They supply electricity to third-party and captive consumers who buy power from them, instead of depending on an expensive grid.

“Fourth Partner Energy is now strengthening its onsite and offsite solar presence in the subcontinent; as well as key markets across South and Southeast Asia. The company is targeting 3 GW of installed solar capacity by 2025 and expansion of capabilities across energy storage, EV charging infrastructure," the statement added.

Fourth Partner Energy’s investors include TPG Capital, which has invested through its impact investment arm The RISE Fund, and a European impact investment fund consortium led by Symbiotics, and responsAbility Investments.

“Our transformational relationship with TPG’s RISE Fund has enabled us to partner with high quality, ESG-centric financiers like Norfund and we continue to seek to work with the best global institutions going ahead," Vivek Subramanian, co-founder and executive director at Fourth Partner Energy said in the statement.

This comes in the backdrop of India working on a so-called ‘green tariff’ policy that will let power distribution companies (discoms) supply electricity generated from clean energy projects at comparatively lower tariffs than that from coal and other conventional fuel sources. Currently, the sole option for a large corporate wanting to procure only green power is to contract it from a clean energy developer as has been the case in the C&I segment.

“Fourth Partner Energy is enabling decarbonization of the C&I sector in one of the most pivotal global markets. We are thrilled to partner with a business that is not just the industry leader but has adhered to high standards of business integrity, ESG and health & safety practices. We look forward to working with their core team and Rise Fund in helping achieve Fourth Partner’s 3GW target by 2025," Anders Blom, vice president, Norfund, said in the statement.

The new rules will also help ensure that if an industry wants only green power from a developer, then the open access applications will have to be approved within a fortnight. Open access allows large users of energy, typically those who consume over 1MW, to buy power from the open market. However, state discoms have not been allowing clean energy developers to use their power transmission and distribution networks to supply electricity to third-party and captive users.

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