Consortium of new investors backs TPG-owned green player Fourth Partner Energy

By Aman Malik

  • 06 Aug 2024
(L-R) Vivek Subramanian and Saif Dhorajiwala, founders-directors, Fourth Partner Energy

A consortium comprising three marquee global investors has backed TPG-owned renewable energy major Fourth Partner Energy with an investment of $275 million (Rs 2,280 crore) that will help the company expand and reach a target portfolio of 3.5GW of assets by 2026.

Fourth Partner Energy – 52% owned by private equity player TPG’s The Rise Fund – which currently has an installed green energy asset base of 1.5GW, has raised the fresh capital from the International Finance Corp (IFC), the Asian Development Bank (ADB) as well as German development finance institution DEG.

IFC, the private sector investment arm of the World Bank Group, is leading the consortium with an investment of $125 million, while ADB and DEG are pitching in with $100 million and $50 million respectively, as a part of the funding round.

In April, VCCircle had reported that while ADB and IFC were said to back Fourth Partner Energy, UK-based Just Climate, which recently closed its inaugural Climate Assets Fund I at $1.5 billion, had dropped out of the race to back the green energy company.

ADB’s $100 million investment includes $70 million from its ordinary capital resources and another $30 million from the Leading Asia’s Prive Infrastructure Fund 2 (LEAP 2).

"We expect that ADB's investment will support the clean energy transition by encouraging domestic and international lenders to engage with independent power producers in this sector,” said Suzanne Gaboury, director general for private sector operations, ADB.

The investment comes even as the company 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.

Fourth Partner Energy 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. The firm has 2,000 projects commissioned for over 300 marquee clients including Walmart, Unilever, Skoda, Hyundai, Tata Motors, Linde, Akzo Nobel, Ultratech Cement, Heidelberg, TCS and Wipro.

The deal has been managed by investment banks like Bank of America and Investec.

Apart from TPG, the company’s other major shareholder is the Norwegian Development Finance institution Norfund.

Some news reports had said that following this investment, TPG may not remain the majority shareholder of the company. VCCircle however could not independently confirm this.

The company was founded in 2010 and is one of the largest renewable energy service providers to commercial and industrial (C&I) clients in India. It provides end-to-end solutions for rooftop solar, wind and solar open access, hybrid renewable energy and battery storage across India and select Southeast Asian countries. In India, its footprint is spread across 24 states.

Apart from its renewable energy portfolio, Fourth Partner also provides hybrid energy, storage solutions and EV charging solutions to C&I companies.

IFC said in a recent disclosure that it expects its investment to lead to a reduction of greenhouse gas emissions in India’s power generation and the benefits of increasing the supply of affordable renewable energy for the C&I segment.

IFC also said that as an anchor investor, its investment will support resource mobilization by providing comfort to new potential investors looking to invest in the company.