Brookfield plans India move, looks at Mytrah, Leap Green
4 min read . Updated: 28 Aug 2015, 07:22 AM IST
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NYSE-listed Brookfield Asset Management is taking its second bet on the Indian green energy sector and is evaluating a potential investment in companies such as Mytrah Energy Ltd and Leap Green Energy Pvt. Ltd.
Brookfield Renewable Energy Partners, controlled by Brookfield Asset Management and with around $200 billion in assets, operates one of the largest publicly-traded green energy platforms globally with 7,300 megawatts (MW) of installed capacity.
“Brookfield has been firming up its India plans and has looked at Leap Green and Mytrah," said a person aware of the development who spoke on condition of anonymity.
The interest stems from the fact that India has pushed renewable energy to the top of its energy security agenda and is looking to provide green power at less than ₹ 4.50 a unit.
India needs as much as $200 billion to meet its target of installing 100 gigawatts (GW) of solar power and 60,000MW of wind power by 2022.
A second person added that “Brookfield is looking at India given the numbers involved".
Brookfield had earlier tied up with India’s largest power generation utility NTPC Ltd, GE Energy Financial Services, Asian Development Bank (ADB) and Kyushu Electric Power Co. Inc. for setting up 500MW of non-conventional power generation capacity. Brookfield Renewable Power Inc., a subsidiary of Brookfield Asset Management, exited the proposed renewable power joint venture (JV) in 2009 in the wake of the worldwide financial melt-down.
In response to a query about Brookfield evaluating firms such as Mytrah Energy and Leap Green Energy for a potential investment, a spokesperson said in an emailed response: “In keeping with our corporate policy, Brookfield has no comment on market rumour and speculation."
Mint reported on 18 August that JP Morgan Asset Management Holdings Inc., the investment arm of JPMorgan Chase and Co., plans to sell half its stake in Leap Green Energy. Avista Advisory Group and Macquarie Capital are advising JP Morgan on the deal, which could potentially be in the range of $200-225 million.
A JP Morgan Asset Management spokesperson declined comment. An external spokesperson for Macquarie also declined comment.
JP Morgan holds about a 75% stake in Leap Green Energy, acquired in tranches since 2010. Leap Green Energy, founded in 2006, is promoted by former Formula 1 driver Narain Karthikeyan’s family. JP Morgan has a total investment of about $100 million in Leap Green Energy.
While Mytrah Energy declined comment, B. Rajeshwaran, manager-legal at Leap Green Energy, said in an emailed response: “We are not confirming your information. We request you not to write any article about our company."
AIM-listed Mytrah Energy in a 16 April statement “announced that it has raised $60 million of new capital in the form of a non-convertible debenture. Together with the cash flow from its existing 543MW operating portfolio and the recently concluded $70 million financing, this new capital provides all of the equity required to take Mytrah Energy’s generating capacity beyond 1,000 MW".
“The new capital has been provided by Merrill Lynch International and Aion Direct Singapore Pte Ltd," the statement added.
Private equity (PE) firms have shown an increasing interest in green energy assets in India. Mint reported on 17 August about ReNew Power Ventures Pvt. Ltd, a renewable energy producer, being in talks with Switzerland-based PE firm Partners Group AG to raise $150-200 million. A subsidiary of Singapore-based Sembcorp Industries Ltd acquired a 60% stake in IDFC Alternatives-backed renewable energy firm Green Infra Ltd for S$227 million in February. In the same month, Actis Capital committed $230 million to create an Indian renewable energy platform called Ostro Energy Pvt. Ltd. In 2012, Morgan Stanley Infrastructure Partners invested $212.03 million in wind power firm Continuum Wind Energy Pte Ltd.
Analysts believe that the government is creating the ecosystem for promoting green energy in India.
“With the proposed amendments to the Electricity Act 2003, the National Tariff Policy 2005, the announcement of the National Renewable Energy Act, 2015, the expected announcements on the national and state renewable energy policies and renewable energy plans, a near complete demand-creation framework for renewables is being formulated at the central government level," Bridge to India, a solar energy consulting firm, said in a 27 July report. .
Meanwhile, Gammon Infrastructure Projects Ltd is in talks with Brookfield Asset Management Inc. for a stake sale in some of its infrastructure assets, managing director K.K. Mohanty said.
He declined to say what the value of the stake sale would be and how soon the deal would be closed.
News channel ET Now on Thursday evening reported that Gammon Infrastructure is selling nine of its special purpose vehicles to Brookfield Asset for ₹ 500 crore and that an announcement was due shortly.
Gammon Infrastructure Projects is a subsidiary of Gammon India Ltd. Gammon Infrastructure’s portfolio of projects comprises five operational road projects and four under construction on a public private partnership (PPP) basis. The company also has two port assets and two renewable energy projects.
Shailaja Sharma in Mumbai contributed to this story.
