Mumbai: International Finance Corp. (IFC), the private sector investment arm of World Bank, on Thursday said it has invested $125 million in Hero Future Energies, the renewable energy arm of the Hero Group, for an undisclosed equity stake.

IFC, together with IFC Global Infrastructure Fund, a private equity fund managed by IFC Asset Management Company, will invest $125 million in equity, enabling Hero Future to set up 1 gigawatt (GW) of greenfield solar and wind plants over the next 12 months across India, it said in a statement.

The investment will help the Hero Future Energies expand its renewable energy capacity, the statement said. IFC had disclosed in August that it has initiated discussions for making the investment in the renewable energy firm.

An IFC spokeswoman declined to share how much equity stake the private sector investment arm of the World Bank holds in Hero Future.

Hero Future has a target of reaching 2.7 GW in renewable energy capacity by 2020. It is led by chairman and managing director Rahul Munjal, and has a presence in 12 states in India with a capacity of over 360 megawatt (MW) across solar, wind and rooftop installations.

“This partnership will fuel our ambitions to tap into the incredible opportunity that lies in both domestic and overseas markets as well as new technologies namely storage, hybrid projects among others,” said Sunil Jain, chief executive officer, Hero Future Energies.

India’s growing energy sector requires $250 billion in investments to reach its target of setting up 100 GW of solar and 60 GW of wind energy capacity by 2022. A large number of overseas investors including Japan’s SoftBank Group and Fortum Oyj of Finland, besides pension funds and infrastructure-focused funds, have already invested in the sector.

IFC is one of the early investors in India’s renewable energy sector, beginning 2009. Its portfolio companies have set up over 3 GW of different forms of renewable power projects in the country. Its advisory team is helping Madhya Pradesh set up a 750-MW solar-power project in Rewa, which will be the largest single-site solar plant in the world when completed.

India is IFC’s top country by exposure. Its committed portfolio in India is over $5 billion as of 30 June 2016. In FY16, IFC committed $1.1 billion in new investments in the country. “In addition to strengthening local capital markets in India, IFC is focused on boosting financing in infrastructure and logistics, promoting financial inclusion, helping create conditions to attract increased private capital, and helping structure public-private partnerships,” the statement said.