New Delhi: Private equity (PE) fund Actis Llp is in talks to buy the Indian solar power business of French energy firm Engie SA, in what may rank among the largest deals in the local renewable energy space, according to a person aware of the development.
Engie Solar, which has an 810 megawatt (MW) solar portfolio in India, has hired Rothschild and Co. to find a buyer for the assets.
Actis’s move follows the acquisition of Shapoorji Pallonji group’s 194MW solar asset portfolio for $200 million, through its renewable energy platform Sprng Energy on 29 March. Actis’s active interest in renewable energy in India comes after it sold its first green energy firm, Ostro Energy, to ReNew Power Ventures at an enterprise value of $1.5 billion last year. The PE firm has a stated strategy of growing its green energy portfolio through acquisitions and bids for new projects.
Following the purchase of Shapoorji Pallonji group’s solar assets, Sprng has a 1.65 gigawatt (GW) portfolio, of which 1.45GW is under various stages of construction.
Actis plans to grow Sprng Energy to 2GW capacity.
“Actis is looking at acquisitions to expand its green energy portfolio in India and has been eyeing Engie’s assets that has been looking for growth capital. Shapoorji Pallonji group’s solar assets were the first acquisition by Sprng Energy," the person cited above said, requesting anonymity.
Mint had on 19 March 2018 reported about Engie’s plans to sell a stake in its solar power portfolio.
With €60.6 billion in annual revenue, Engie is the world’s largest electricity generator outside government control, with an installed capacity of 115.3GW. Of this, 22% is from renewable energy sources. Engie plans to set up 2GW capacity in India by 2019. It also has a wind power portfolio of 280MW.
Engie India manager Malcolm Wrigley, in an emailed response, declined to comment on “market speculations". Queries emailed to an Actis spokesperson on Monday evening remained unanswered.
An external spokesperson for Rothschild said in an email: “I have been mandated to post to you that Rothschild & Co. does not comment on market speculations."
There has been a growing interest in Engie’s solar assets. Mint reported on 31 July that Edelweiss Infrastructure Yield Plus Fund was in talks with Engie to pick up a stake in its Indian solar business.
Engie’s move comes at a time when financing at the lowest cost has become the key to success, given the record low tariffs. Besides, India has introduced a safeguard duty for two years on solar cells and modules imported from China and Malaysia that has further underlined the need for competitive financing.
India has an installed renewable energy capacity of 74.79GW, of which solar and wind power accounts for 25.21GW and 35.14GW, respectively.