New Delhi: Ayana Renewable Power, a renewable energy firm operating in India and neighbouring countries, is scouting for acquisitions.

The CDC Group Plc-backed company’s focus areas are the Indian states of Bihar, Odisha and Assam, and South Asian countries like Bangladesh, Nepal, Myanmar and Sri Lanka.

“Ayana Renewable wants to acquire projects," said a person aware of the development, requesting anonymity.

CDC Group has invested $1.3 billion in India since 1987, including in Green Infra Ltd. The UK government’s development finance institution is also one of the largest investors in private equity funds in South Asia, supporting 37 funds investing across the region, according to its website.

“At this stage, I can confirm that the Ayana team is looking for opportunities, but they don’t have anything to announce yet," said a CDC Group spokesperson in an emailed response.

Mint reported on 23 February last year about CDC Group’s plans to set up its own renewable energy platform for India and South Asian countries. In April last year, CDC Group announced an investment of up to $100 million to support the development of renewable energy projects in India.

Companies in the clean energy business say that while there are limited large platforms available for sale in India, there are many opportunities in the mid-sized project space.

“While there are few large platforms such as Actis Llp’s Ostro Energy Pvt. Ltd and Orange Renewable up for acquisition, there are a lot of small- and mid-sized projects up for sale," said a New Delhi-based chief executive of a clean energy firm, requesting anonymity.

There is a growing overseas interest in India’s clean energy programme, with the government setting an ambitious target of putting in place 175 gigawatt (GW) of clean energy capacity by 2022. Of this, 100GW is to come from solar projects. A case in point is Royal Dutch Shell Plc, the world’s second-biggest publicly traded oil company. Shell plans to acquire a majority stake in Hyderabad-based rooftop solar firm Fourth Partner Energy, Mint reported on 22 February. This interest also comes at a time when concerns have been expressed over some Indian states looking to renege on their offtake commitments for projects awarded at a comparatively higher tariff.

The concern was flagged in the Economic Survey presented last month. The survey said that India’s quest for low clean energy tariffs “possibly contributed" to demands for renegotiation of the already signed power purchase agreements. This, in turn, may result in legal battles and banks becoming wary of lending to such projects, it cautioned.

India’s quest for low tariffs is being seen as the reason for these concerns. The country’s wind power tariffs plummeted to Rs2.43 per kilowatt-hour (kWh) at an auction conducted by state-run Gujarat Urja Vikas Nigam Ltd last month, beating the record low solar tariff of Rs2.44 per unit registered in May. At an auction conducted this month, they remained near the record low, with bidders quoting tariffs as low as Rs2.44 per unit for wind power contracts.

While solar power tariffs rose to Rs2.65 per kWh at an auction conducted by the Gujarat government in September, last month’s auctions conducted by state-run Solar Energy Corp. of India threw up winning bids of Rs2.47 and Rs2.48 per unit.

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