Mumbai: French government-owned power utility EDF SA’s renewable energy arm and EREN, another French company, plan to invest a total of 550 crore in New Delhi-based ACME Solar Energy Pvt. Ltd to set up solar power plants in India, a senior ACME executive said on Thursday.

ACME will hold a 50% stake in a new joint venture in which the two French companies will hold 25% each, ACME chairman Manoj Kumar Upadhyay said in a telephonic interview on Thursday.

“Our agreement with EDF and EREN is for a total investment of 550 crore," he said, adding that the French companies will initially invest 275 crore in the joint venture and after the company reaches the 200 megawatt (MW) mark, the French investors will put in an additional 275 crore.

ACME plans to fund the projects through a combination of debt and equity in a 70:30 ratio. The company has already arranged finance through multilateral agencies like International Finance Corp., the private lending arm of the World Bank and Indian banks such as State Bank of India, Upadhyay said.

The tie-up with the French investors would not only help his company meet the funding requirements but also offer economics of scale, he said.

EDF has more than 600 MW solar power capacity and is looking it to expand further, said Upadhyay.

Kameswara Rao, executive director and leader of energy, utilities and mining practice at global consulting firm, said “energy is attractive to overseas investors for many reasons. Project development risks being far lower as land and fuel issues are not major issues, or even applicable. Secondly, policy and regulatory support in India has been broadly positive over the years. Lastly, overseas financing for green energy has more options than conventional projects do."

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