AM Green, a hydrogen and ammonia producer owned by the founders of Indian renewable company Greenko Energy Holdings, is planning to raise around $1 billion to fund its growing business, according to people familiar with the matter.

The firm is working with an adviser on the fundraising to bolster its ability to produce green hydrogen and other chemical compounds, the people said, asking not to be identified as the information is private. AM Green aims to build a million tonnes a year of green methanol capacity, one of the people said.

Singapore sovereign wealth fund GIC Pte and the renewable energy arm of Malaysian state oil giant Petronas Nasional Bhd. announced an investment in AM Green Ammonia Holdings, according to a statement Sunday confirming a Bloomberg News report. The project is set to produce 5 million tons of green ammonia a year, the statement showed.

Discussions are ongoing and details of the fundraising could change, the people said. A representative for AM Green declined to comment.

Green ammonia and hydrogen are expected to play a bigger role in electricity generation, shipping and hard-to-abate industries like oil refining, chemicals, fertilizer and steel in the coming years. In India, which is aiming for net zero by 2070, AM Green joins heavyweights Adani Group and Reliance Industries Ltd. in making ambitious investments in such technologies.

Green methanol, produced from renewable sources, is seen as a climate-friendly energy source that can be used to decarbonize transportation. It can also be used as a low-carbon feedstock for making a range of industrial chemicals.

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AM Green, founded by Anil Chalamalasetty and Mahesh Kolli, is developing production capability for molecules including green hydrogen, green ammonia, biofuels, green caustic soda and e-methanol, the announcement showed. Greenko, the Hyderabad-based solar, wind and hydro power company also started by Chalamalasetty and Kolli, has received backing from GIC as well as sovereign wealth fund Abu Dhabi Investment Authority, its website shows. Japanese financial firm Orix Corp. completed its acquisition of a $961 million stake in Greenko in 2021.

(Updates with green methanol context in sixth paragraph.)