British International Investment

Fourth Partner Energy Private Limited

South AsiaInfrastructure

Fourth Partner Energy is a leading Indian renewable energy company for commercial and industrial businesses. The firm partners with India’s largest companies to expand their use of renewable energy, helping them offset their energy requirement through clean and green sources. Its solutions include solar and wind, battery storage, wind-solar hybrid, energy trading and EV charging infrastructure.

Fourth Partner Energy is operational across Vietnam, Indonesia, Bangladesh and Sri Lanka today, along with a pan-India presence.

Our investment

Description of the investment.

Our investment in the company will fund approximately 295 megawatts of greenfield renewable energy generation capacity across India, Sri Lanka, Vietnam, Bangladesh, and Indonesia. This new capacity will increase the supply of renewable power for businesses, estimated to avoid 326,000 tonnes of carbon dioxide emissions each year. Our investment will help accelerate the uptake of renewable energy and help catalyse the sector’s growth in the region.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact

Increase the share of renewable generation in the energy mix to avoid greenhouse gas emissions (SDG 7.2 and 13.a).

How?

How?
  • Direct: Through funding the development of approximately 295 megawatts of greenfield renewable energy generation capacity in India, Sri Lanka, Vietnam, Bangladesh, and Indonesia to displace on-grid electricity consumption from primarily fossil fuel thermal generation sources.

Who?

Stakeholder Geography Characteristics
Planet

Global

n/a

How much?

Scale Depth/Duration

Our investment is estimated to avoid over 326,000 tonnes of carbon dioxide emissions each year - 80 per cent in India, 15 per cent in Sri Lanka and 5 per cent across Vietnam, Indonesia and Bangladesh.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Capital is not offered in the market in sufficient quantity and on suitable terms to meet the scale of India’s renewables targets. Mezzanine financing for commercial and industrial solar in other target markets is unavailable in sufficient quantity given the sector’s nascency.
  • Market: The commercial and industrial solar business model remains relatively nascent in some South Asian markets, and therefore executing projects in Sri Lanka and Bangladesh may contribute to catalysing the market in the medium to long term through a demonstration effect.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

2.83

Risk

External Risk
  • Market: Relates to the risk of regulatory and/or policy adverse changes which could affect the viability of pre-construction distributed solar projects and therefore prevent impact from occurring. However, projects are likely to remain commercially viable even in the event of moderate changes.
Execution Risk
  • Relates to the risk of delay in completion of projects, for example, due to land acquisition or approval requirements. We consider this low risk because Fourth Partner has demonstrated execution capabilities in India.
Unexpected Impact Risk
  • Risk of negative impact on Indian distribution companies’ financial sustainability due to reduced revenues from C&I customers. We consider this low because C&I solar currently represents less than 1 per cent of total power generation in the market.

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

We continue working on the ESAP and areas of focus that were identified at the time of the main investment via regular engagement with the environmental and social manager.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4483
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Infrastructure

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Debt
    Start date :
    January 2022
    Amount :
    $47.16m
    Currency of investment :
    INR
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India
    Climate finance

    Indicates whether the investment is climate finance qualified or partially climate finance qualified and the type of climate finance (adaptation, mitigation or both). We define climate finance using the multilateral development bank (MDB) and the International Development Finance Club (IDFC) Common Principles climate finance methodology. See Common Principles for Climate Mitigation Finance Tracking and Common Principles for Climate Change Adaptation Finance Tracking. We provide the climate finance qualification and type for commitments from 2020 onwards, which is when we launched our Climate Change Strategy.

    :
    Fully qualified
    Climate finance type:
    Mitigation

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 01 $34.5m South Asia Infrastructure April 2021 Active

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