Brookfield's big sale has many investors interested

Canada’s Brookfield Asset Management Inc. is a major investor in India’s green energy space.  (Reuters)
Canada’s Brookfield Asset Management Inc. is a major investor in India’s green energy space. (Reuters)

Summary

  • BluPine, Torrent, Sembcorp, Edelweiss, JSW eye Brookfield’ 1.6 GW portfolio

NEW DELHI : Actis Llp’s BluPine Energy, Singapore’s Sembcorp Industries Ltd, Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy, Torrent Power and JSW Group are exploring to buy Brookfield Renewable’s 1.6 gigawatt (GW) portfolio in India, two people aware of the development said. The deal is expected to have an equity value of around $800 million.

JP Morgan is running the sale process for the 1.6 GW capacity, of which 1 GW is operational, while the balance 600 MW is under execution. Canada’s Brookfield Asset Management Inc. is a major investor in India’s green energy space. Its Brookfield Global Transition Fund (BGTF) has committed to invest $1 billion in Avaada Ventures Pvt. Ltd. Also, Brookfield Renewable last year acquired a controlling stake in rooftop solar power producer CleanMax Enviro Energy Solutions Pvt. Ltd for $360 million. Brookfield Asset Management has also signed an agreement with Mukesh Ambani promoted Reliance Industries Ltd to explore opportunities to manufacture renewable energy and decarbonization equipment in Australia.

“The non-binding offers (NBOs) are expected to be submitted shortly," said one of the two people cited above on the condition of anonymity.

Spokespersons for Brookfield Asset Management Inc., JP Morgan, Actis, Edelweiss Alternatives and JSW Energy declined comment. Queries emailed to the spokespersons of Torrent Power and Sembcorp Industries Ltd on Thursday evening remained unanswered till press time.

Brookfield, which has over $900 billion in assets under management worldwide, has invested $25 billion in India. The Brookfield Renewable portfolio comprises an installed capacity of around 33 GW across hydroelectric, wind, utility-scale solar, storage and green energy sources.

The Economic Times on 1 February reported about Brookfield looking to sell 1.6 GW clean energy assets and hiring JP Morgan for the process.

The green energy firms interested in Brookfield assets have been active in India’s green energy transition space given the opportunities offered. Actis, which invests only in emerging markets, has so far committed $2.1 billion for India, and now has its third clean energy firm Blupine Energy in the space, after selling Sprng Energy and Ostro Energy to Shell Plc. and ReNew Power Ventures respectively. With $800 million from Actis’ Energy Fund 5, BluPine Energy is developing grid-connected solar and wind power parks, besides commercial and industrial projects with plans to develop 4GW portfolio in India.

Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy is also active in the sector, and is the front runner to buy solar projects totalling 350 megawatts (MW) from O2 Power, promoted by Singapore’s Temasek and European alternative asset manager EQT, in a deal having an equity and enterprise value of $50 million and $200 million, as reported by Mint earlier. Edelweiss Infrastructure Yield Plus, the alternative investment fund managed by Edelweiss Alternatives invests in operating assets across sectors, including roads, renewables and transmission. It has been active in green energy, and in 2021 acquired 74% stake in the solar portfolio of the Engie Group in India with 813 MW of operating capacity. It is also interested in Macquarie Group’s sale of 400 MW solar power projects of its Stride platform with the potential deal having an equity value of around $300 million.

Sembcorp Ltd is also in talks with ReNew Energy Global Plc to buy solar energy projects totalling 350 MW, with the deal estimated at around $241 million at the enterprise level and around $121 million in equity. This comes after the earlier proposed deal totalling 1.1 GW of ReNew’s solar and wind power assets of 350 MW and 750MW, respectively couldn’t be agreed upon to due to a valuation mismatch on wind assets. Ahmedabad-based Torrent Power had also earlier submitted a NBO for ReNew’s solar and wind power assets totalling 1.1 GW.

India has an installed renewable energy capacity of 180.79 GW, including 73.31 GW solar and 44.73 GW of wind power capacity. The government’s objective is to add 50 GW of green energy capacity annually to reach 500 GW renewable capacity by 2030.

Also, India’s updated Nationally Determined Contribution (NDC) submitted to the United Nations Framework Convention for Climate Change (UNFCCC), have committed to achieve 50% of installed power generation capacity from non-fossil fuel-based energy sources by 2030.

This in turn is attracting investors, with the country getting $6.13 billion foreign direct investment in the renewable energy sector from April 2020 till September 2023, according to the Department for Promotion of Industry and Internal Trade (DPIIT).

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