New Delhi: South Africa’s Phelan Energy Group, which has played a part in lowering India’s solar tariffs with its aggressive bids, is in talks to acquire 200 megawatts (MW) of projects here.
This is the first buyout in India planned by the Cape Town-based firm that bid Rs2.62 per kilowatt hour (kWh) in May last year to win contracts to build a 50MW unit at Bhadla in Rajasthan.
The firm is also in partnership talks with investors for its first project in the country.
“Apart from our Bhadla project, we have in excess of 200MW deals in development in various parts of India," said Tumul Dwivedi, head of Phelan Energy’s Indian operations, in an emailed response. He declined to elaborate on the deals.
With India’s wind and solar tariffs at a record low, it is the lower cost of foreign capital and the size of the Indian clean energy market that has helped India’s emerging green economy.
There is growing overseas interest in India’s clean energy programme, with the government targeting 175 gigawatts (GW) of clean energy capacity by 2022. Some of the overseas clean energy firms and funds active in India are: SBG Cleantech, a joint venture between Japan’s SoftBank Group Corp., India’s Bharti Enterprises Ltd and Taiwan-based Foxconn Technology Group; Actis Llp; Engie’s Solairedirect SA; Italy’s Enel; Singapore’s Sembcorp; and Saudi Arabia’s Alfanar.
“We have had project partnership discussions with local investors, who would guide us through the new regulative challenges. Our price of Rs2.62 kWh is financially attractive with recent tenders," Dwivedi added.
India registered a record low solar tariff of Rs2.44 per unit in May last year. While solar power tariffs rose to Rs2.65 per kWh at an auction conducted by the Gujarat government in September, last December’s auctions conducted by state-run Solar Energy Corp. of India threw up winning bids of Rs2.47 and Rs2.48 per unit.
“Phelan Energy is looking to acquire projects here to scale up its portfolio," said a person aware of the firm’s India playbook, on condition of anonymity.
There is growing consolidation in the Indian clean energy space. Some of the deals in the works as reported by Mint include Greenko Group, Hero Future Energies and Sembcorp Industries Ltd’s interest in buying clean energy producer Orange Renewable from Singapore-based AT Capital Group; global private equity firm Actis Llp exploring the sale of Ostro Energy Pvt. Ltd to ReNew Power Ventures; and Royal Dutch Shell Plc’s plans to acquire a majority stake in Hyderabad-based rooftop solar firm Fourth Partner Energy.
Also, Mytrah Energy (India) Pvt. Ltd is in talks with potential investors to raise $500 million by selling a stake in the company, Mint reported on 12 March.
“Our organization is fully committed to support the vision of PM Modi and his team of ministers who are promoters of a larger share of solar energy capacity within the Indian energy mix. Phelan Energy Group will be part of this ambitious plan and sees India as a steady growth market for the years to come," Dwivedi said.
This comes against the backdrop of Prime Minister Narendra Modi on Sunday outlining 10 action points at the International Solar Alliance (ISA) founding conference here. These include increasing solar power in the energy mix, ensuring availability of better and cheaper solar power for all, concessional financing for solar projects, and creating a network of centres of excellence.
“We see remarkable prospects in the Indian solar market," added Paschal Phelan, founder and executive chairman of Phelan Energy Group in an email.