Private equity (PE) investors KKR and Actis are in talks to acquire a solar portfolio of 435 megawatts (MW) from Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ)-backed Azure Power Global Ltd, said three people aware of the development.
“KKR and Actis are interested in acquiring the portfolio of solar projects from Azure. The transaction is likely to happen at a value of around $200-250 million," said the first person cited above, requesting anonymity.
Investment bank Avendus Capital is advising Azure, the person said, adding that “the idea is to sell operating projects to release capital and use that for new and under-development projects in the pipeline".
Others such as Brookfield, Edelweiss, Ayana Renewable Power and O2 Power had also shown interest in the assets of Azure Power, though the talks eventually advanced only with KKR and Actis, said the second person cited above on condition of anonymity.
CDPQ is a majority shareholder in Azure Power with a 50.9% stake. The World Bank’s private sector development arm International Finance Corporation (IFC) is among the other investors in Azure Power, India’s first renewable energy company to list on the US stock market.
Azure Power has a pan-India portfolio of over 7 gigawatts (GW). Founded in 2008, it had developed India’s first utility-scale solar project in the following year.
KKR, Actis, Avendus and Azure Power declined to comment.
KKR and Actis have been active investors in the Indian renewable sector. In April, KKR acquired 317MW of solar assets from the Shapoorji Pallonji Group for ₹1,554 crore (about $204 million). The sale included 169MW of solar projects in Maharashtra and 148MW in Tamil Nadu.
For KKR, this was the second investment in Indian infrastructure, following its May 2019 investment in India Grid Trust, an infrastructure investment trust (InvIT), which buys and operates power transmission line assets, and is currently planning to expand into solar power.
Earlier in February, The Economic Times reported that Actis had agreed to acquire around 600MW of solar projects from Delhi-based renewable energy company Acme Solar.
Several other renewable energy portfolios are also on the block.
Mint reported on 26 May that Saudi Arabia’s Alfanar Group is looking to sell half of its 600MW wind power projects in India.
Finland’s state-controlled power utility Fortum Oyj is also looking for buyers for its 500MW Indian solar projects, Mint reported on 1 June. At least six firms, including Canada Pension Plan Investment Board (CPPIB), Brookfield Asset Management Inc., PE firms Actis, KKR, Macquarie Group, and Edelweiss Infrastructure Yield Plus Fund, have evinced interest in taking a majority stake, Mint reported.
Mahindra Susten, the renewable energy business of Mahindra and Mahindra group, is also looking to sell a large chunk of solar projects, Mint reported earlier.