American solar panel maker First Solar is exploring a potential sale of around 45 megawatts (MW) of its solar power assets in India, two people aware of the development said.
First Solar is a leading global provider of photovoltaic (PV) solar systems and has supplied solar panels worth over 20 gigawatts (GW), according to the company’s website. The company reported a revenue of $2.2 billion in 2018.
“First Solar has started engaging with prospective buyers for sale of its solar assets of 45MW. These assets are located in the state of Karnataka. They haven’t appointed a banker to manage the process and are doing it on their own. They are reaching out to both financial and strategic investors," said the first person cited above, requesting anonymity as the talks are private.
A second person aware of the talks added that the sale could fetch an enterprise valuation of around ₹300 crore. He too spoke on the condition of anonymity.
Both the people did not offer any time frame for concluding a deal as the talks are at a preliminary stage.
An email sent to First Solar did not elicit any response.
This is the second solar asset sale planned by First Solar in India.
In 2017, it sold 190MW of solar power assets to IDFC Alternatives. The asset sale comprised seven projects located in the states of Andhra Pradesh and Telangana.
“First Solar’s primary business is making solar panels and that is the focus area for them. They build these assets with the aim to eventually monetize them when there is an opportunity, given that the strategy is not to hold on to these assets for long periods of time," said the second person cited above.
As part of its strategy, First Solar has developed and sold solar assets in other markets as well.
Last year, it announced the sale of a 100MW solar project in California to an affiliate of D.E. Shaw Renewable Investments. In 2017, EDF Renewable Energy acquired assets worth 179MW from First Solar.
The Indian renewable energy space has seen strong merger and acquisition activity recently.
Mint reported last month that Mahindra Susten, the renewable energy arm of Mahindra group, is selling 160MW of solar assets. Mint reported on 12 April that ReNew Power Ltd, India’s largest clean energy company, and state-run power utility NTPC Ltd have shown interest in the ongoing sale process of PTC India Ltd’s wind power business, which includes 290MW of wind assets.
Other M&A deals in the works in the sector include Morgan Stanley’s exit from its wind energy platform Continuum Wind Energy, reported by Mint in January.
Fotowatio Renewable Ventures also plans to exit its only investment in the Indian solar power space and Engie SA is planning to sell a significant stake in the French energy firm’s Indian solar business.
Recently, the Piramal group tied up with Canada’s largest pension fund manager Canada Pension Plan Investment Board (CPPIB), to set up India’s first renewable energy-focused infrastructure investment trust (InvIT). The two partners plan to invest up to $600 million in the InvIT to acquire operating renewable assets.
Several major M&A deals were also struck in the sector last year.
Greenko Group, one of India’s top renewable energy platforms, bought Orange Renewable from Singapore’s AT Capital Group at an enterprise value of under $1 billion and another 385MW of renewable assets from Skeiron Renewable Energy.
Renew Power bought 1.1GW of renewable energy assets from private equity firm Actis-owned Ostro Energy.