Acme appoints EY to sell InvIT stake

Acme Solar’s InvIT will house 1.8GW of operating solar assets.
Acme Solar’s InvIT will house 1.8GW of operating solar assets.

Summary

  • The Acme Solar InvIT will be privately listed and will be sponsored by India’s largest pure-play solar platform Acme and incoming investors

Acme Group has mandated EY to sell up to 51% in its proposed infrastructure investment trust (InvIT) for around $1.3 billion (around 10,800 crore), two people aware of the development said, in what may rank among the largest green energy deals in India.

The Acme Solar InvIT will be privately listed and will be sponsored by India’s largest pure-play solar platform Acme and incoming investors. The InvIT will house 1.8 gigawatts (GW) of operating solar assets. InvITs manage income-generating infrastructure assets, typically offering investors a regular yield and a liquid method of investing in infrastructure projects.

“Initial conversations are ongoing with select investors," said one of the two people cited above, requesting anonymity.

Investors have been eyeing the InvIT route, with KKR & Co.-backed India Grid Trust (IndiGrid) being the country’s first listed power sector InvIT.

An EY spokesperson declined comment while queries emailed to the spokesperson of Acme Group remained unanswered till press time.

Founded in 2003 by Manoj Kumar Upadhyay, Acme Solar has 8.5GW of operational and under-development projects. The company has been trying to raise funds and had earlier given a formal mandate to Rothschild & Co. to raise $500 million equity by selling a stake in Acme Cleantech Solutions Pvt. Ltd. Acme Solar was earlier also looking to sell 4.84GW of solar projects, with Cantor Fitzgerald (Hong Kong) Capital Markets Ltd running the sale process.

India has emerged as the preferred green energy investment destination given the number of deals in play as reported by Mint. According to Invest India, currently there is an investment opportunity of around $216 billion in the renewable energy space in India. Data showed that 467 renewable energy projects are underway across 230 districts in the country with 150 promoters.

India has a renewable energy capacity of 179GW, with a playbook to add 50GW annually to reach 500GW of renewable capacity by 2030. This, in turn, has led to a demand for solar modules that account for more than 60% of the total project cost. With India importing $3 billion worth of solar photovoltaic cells, panels and modules in FY22, the government has come up with a production-linked incentive scheme for polysilicon manufacturing and aims to have a 100GW domestic solar module manufacturing capacity.

Also, there is a huge interest in green hydrogen in the country with 5.8 million tonnes of green ammonia capacity coming up. Green hydrogen is produced by splitting water into hydrogen and oxygen using an electrolyzer that may be powered by electricity from renewable energy sources such as wind and solar. As part of its green hydrogen playbook, India wants to encourage green hydrogen exports to Japan, South Korea and Europe, and has allowed concessional green electricity, an inter-state transmission charges waiver, land in renewable energy parks and mega manufacturing zones for promoting green hydrogen and green ammonia.

Acme on its part has lined up ambitious plans for India and has inked an agreement with the Karnataka government to invest 52,000 crore to set up a green hydrogen and green ammonia project. The firm is also setting up a large green hydrogen and green ammonia project at a special economic zone at Duqm in Oman, which will require an investment of around $6 billion. Acme Solar has entered a 50:50 joint venture with Norwegian energy firm Equinor-backed Scatec ASA to design, develop, build and operate the facility. The plant will supply emission-free fuel to Europe and Asia.

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