Enel picks HSBC to sell India green portfolio

India has a renewable energy capacity of 179GW, with the playbook to add 50GW of green energy capacity annually to reach 500GW renewable capacity by 2030.
India has a renewable energy capacity of 179GW, with the playbook to add 50GW of green energy capacity annually to reach 500GW renewable capacity by 2030.

Summary

  • The portfolio of Enel Green Power India comprises 760MW of operational wind and solar power assets and a development pipeline of 2GW

NEW DELHI : Italy’s Enel Group is looking to sell its entire renewable energy business in India and has hired HSBC for the transaction, two people aware of the development said. The proposed deal may have an equity value of around $300 million, the people said.

The portfolio of Enel Green Power India comprises 760 megawatts (MW) of operational wind and solar power assets and a development pipeline of 2 gigawatts (GW). It also has power purchase agreements totalling 190MW. Of the operational capacity, solar power projects comprise 420MW, with the balance 340MW coming from wind power projects. The sale process is expected to be launched shortly. “The process is at a very early stage," said one of the two people on the condition of anonymity.

In 2020, Enel Green Power India joined hands with Norfund, a Norwegian development finance institution, to jointly finance, build and operate new renewable projects in India. Enel Group was also interested in taking over the electricity distribution functions of Puducherry, and had submitted non-binding offer to buy Reliance Infrastructure Ltd’s Delhi electricity distribution businesses.

An Enel’s spokesperson said in an emailed response, “We decline to comment on market rumours." An HSBC spokesperson also declined comment.

There has seen a raft of Indian green energy deals, including Acme Group mandating EY to sell a majority stake up to 51% in its proposed infrastructure investment trust (InvIT) in a deal expected to have equity value of around $1.3 billion, in play, as reported by Mint. Also, India’s quasi-sovereign wealth fund National Investment and Infrastructure Fund (NIIF)-backed Ayana Renewable Power Pvt. Ltd looking to sell a significant majority stake in the green energy firm that may translate into up to 100% stake sale at an equity valuation of around $2 billion. In addition to the stake sale of the existing shareholders, the company is also looking to raise around $400 million in primary equity.

While solar energy projects face challenges such as land acquisition and adequate electricity transmission infrastructure, once the early-stage risks are past, these projects command a premium given the growing power demand in the country. India recently set a new peak power record of 239.9GW on 1 September, exceeding the Central Electricity Authority’s projections of 230GW. India has a renewable energy capacity of 179GW, with the playbook to add 50GW of green energy capacity annually to reach 500GW renewable capacity by 2030.

Given the growing energy demand in India, investment projections for renewable energy sector have been robust, with the world’s premium energy monitor, the International Energy Agency (IEA) in its World Energy Outlook 2023 projecting a doubling of investments in clean energy supply and clean technology manufacturing in India by 2030 from $60 billion in 2022.

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

With India undergoing an ambitious green energy transition, the Indian government has also taken a host of steps to attract investment in the green energy space that includes; 100% Foreign Direct Investment (FDI) under the automatic route, waiving off interstate electricity transmission system (ISTS) charges for solar and wind power sale from projects commissioned before 30 June 2025, upfront Renewable Purchase Obligation (RPO) trajectory till 2029-30, sale of green power against letter of credit (LC) and advance payment to ensure timely payment to developers, and launch of Green Term Ahead Market (GTAM) among other measures.

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