IFC, ADB, DEG invest $275 mn in Fourth Partner Energy

New Delhi: C&I-focused renewable energy company Fourth Partner Energy Ltd (FPEL) has secured a funding of $275 million from a consortium of World Bank’s International Financial Corporation (IFC), Asian Development Bank and the German Investment Corporation, DEG.

In a statement, the company said that the equity infusion would help FPEL’s business expansion plans and help it reach the target of 3.5 GW renewable energy asset portfolio by 2026. Out of the $275 million, IFC is investing $125 million, while ADB is infusing $100 million and Germany’s DEG is putting in $50 million to complete this round of fundraising.

In April, Mint reported that a consortium including IFC and ADB may invest around $250 million in the renewable energy company.

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FPEL has an installed base of 1.5 GW of green assets and is set to commission the first phase of its maiden 575 MW wind-solar hybrid project under the ISTS (Inter State Transmission System) route, in Karnataka, later this quarter.

FPEL priorities

Vivek Subramanian, Co-founder & ED, Fourth Partner Energy said, “Our investors and lenders keep coming back as financiers because FPEL prioritises commercial viability and robust returns, while focusing on scaling the business. We welcome IFC, ADB and DEG as new partners to join our existing high quality equity investor base comprising of Norfund and TPG. Fourth Partner Energy is now poised to transform the region’s clean energy landscape and assist more businesses in reaching their RE100 goals in a just, equitable manner.” 

Imad N Fakhoury, IFC’s Regional Director for South Asia noted that reducing the energy sector’s carbon footprint is critical for realizing India’s green ambitions. 

“Our investment will help FPEL to expand its renewable energy offerings and increase the supply of affordable, clean energy for commercial and industrial consumers across the country. Strategic investments in distributed generation through corporate PPAs are creating a new asset class, key to diversifying India’s energy mix,” the IFC Regional Director said.

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India’s renewables sector is expected to attract an annual investment of $25 billion by 2030, and the commercial and industrial (C&I) consumer space has been attracting significant investments. 

“For ADB, investing into FPEL includes $70 million from our ordinary capital resources and $30 million from Leading Asia’s Private Infrastructure Fund 2 (LEAP 2), administered by ADB. Providing commercial and industrial users in India with access to clean and renewable energy will foster growth of the sector while helping to achieve net-zero emissions," said Suzanne Gaboury, ADB Director General for Private Sector Operations. 

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“FPEL combines rapid growth in building a solar and wind park portfolio with the high demands of first-class clients and can thus be a driver of CO2 reduction and energy transition in India. FPEL is currently developing additional capacities of 1.2 GW of open access projects across Maharashtra, Uttar Pradesh, Tamil Nadu, and Gujarat; while continuing to focus on ISTS, on-site solar and battery storage as key business verticals,” said Monica Beck, member of DEG’s managing board.

Speaking to reporters on Tuesday, Vivek Subramanian, Co-founder of FPEL said that about 90% of shares of the company is owned by the investors.

Norfund is the single largest investor in FPEL so far, having invested nearly $145 million into Fourth Partner Energy, through two funding rounds, in 2021 and 2023.