Edelweiss arm eyes Rising Sun’s 140MW solar assets

Mumbai: An investment arm of financial services company Edelweiss is closely evaluating buying out 140 megawatts (MW) of solar power assets at the Bhadla solar park in Rajasthan, two people aware of the development said. The assets, owned by Delhi-based Rising Sun Energy, are likely to command a value of about ₹ 800-900 crore.

The $1 billion Edelweiss Infrastructure Yield Plus Fund, an infrastructure-focused alternative investment fund managed by Edelweiss Alternative Asset Advisors Ltd, is yet to make its first investment in the renewable energy sector. One of the two people cited above told Mint: “The energy sector is not Edelweiss’s core area of strength; they have been doing intense evaluations of some projects over the last few months and are careful not to get anything wrong.” Mint reported in July that Edelweiss was evaluating buying a stake in the local solar energy assets of French power company Engie, which has an 810MW solar portfolio in India through its Solairedirect unit. The second person cited above said talks fell through in their final stages and that Edelweiss has shifted focus to Rising Sun instead.

Located near Jodhpur and bordering the Thar desert, the Bhadla solar park is slated to be the largest of its kind in India once it is fully commissioned. Spread over 10,000 acres, it will have an installed capacity of 2,255MW at peak production in December 2019. Both Rising Sun and SolaireDirect are present at Bhadla and had won their first bids here at a tariff of ₹ 4.35 a unit in January 2016.

Emailed queries sent to both Edelweiss and Rising Sun went unanswered at the time of going to press.

Deal-making in the renewable energy space has slowed down since April, when ReNew Power announced its ₹ 10,200 crore acquisition of Ostro Energy’s 1,100MW portfolio. Since then, several attempted acquisitions within the clean energy space have failed to complete because of a changing policy environment, the government’s imposition of a 25% safeguard duty on imported solar modules, a falling rupee and reluctance among buyers to enter the clean energy space at expensive valuations. “Renewable energy’s share of new capacity additions for power generation has been the largest at around 60% over the last two years, while additions to coal-fired generation capacity have slowed sharply,” Abhishek Tyagi, vice-president and senior analyst, Moody’s, said in a 25 September report.

“In addition, large companies have announced plans to make their operations more energy-efficient and source more renewable energy. But the sector also faces challenges, despite its strong growth prospects, notably weak off-taker credit quality and a regulatory environment that is still developing”.

These challenges have slowed down acquisitions in the clean energy space, with plans by leading renewables players like Acme Solar and ReNew to go public currently stagnant for want of buying interest from large investors while the Greenko group called off its earlier plans to buy Orange Renewable from Singapore’s AT Capital.