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At least 20 entities including top Indian companies and blue-chip foreign investors are vying for Actis Llp’s Indian renewable energy platform Sprng Energy, two people aware of the development said, in a transaction that may rank among India’s largest green energy deals.

BlackRock Inc., Adani Group, JSW Group, Brookfield Asset Management Inc., KKR, Macquarie Group and four Canadian pension funds—Canada Pension Plan Investment Board (CPPIB), Caisse de dépôt et placement du Québec (CDPQ), Ontario Municipal Employees’ Retirement System (OMERS) and Ontario Teachers’ Pension Plan (Ontario Teachers)—are among entities that have signed non-disclosure agreements (NDAs) for the transaction, the people cited above said on condition of anonymity.

Bank of America is running the sale process for Actis, with the equity value of the deal estimated by the people cited above at more than $1 billion. The non-binding bids are to be submitted before Christmas, with the sales purchase agreement (SPA) expected to be inked by March next year.

Sprng Energy has an operational portfolio of 1.75 gigawatts (GW) and 5GW under various stages of implementation.

Queries emailed to an Actis spokesperson on Sunday remained unanswered. Spokespersons for Bank of America, KKR, Brookfield Asset Management, Macquarie Group, CPPIB, CDPQ, OMERS, JSW Group and Ontario Teachers declined comment, while queries to spokespersons of BlackRock and Adani Group remained unanswered.

The Sprng sale follows Actis previously selling Ostro Energy Pvt. Ltd to ReNew Power Ventures in 2018 at an enterprise value of $1.5 billion. Earlier this year, Adani Green Energy Ltd (AGEL) bought Japan’s SoftBank Group Corp. and Bharti Enterprises Ltd owned solar power producer SB Energy India for an enterprise value of $3.5 billion. Recently, OMERS bought a 19.4% stake in NYSE-listed Azure Power Global Ltd for $219 million from IFC and IFC GIF Investment Company.

Canadian pension funds have been active in India’s green energy space and represent the so-called patient capital, which seeks modest yields over time. Also, Thailand’s state-owned energy major PTT Group announced its acquisition of a 41.6% stake in Avaada Energy Pvt. Ltd for around $454 million.

The Sprng Energy sale plan comes in the backdrop of a growing focus on environmental, social and governance (ESG) investing, and India’s decarbonization play has caught investors’ interest. At the COP-26 summit in Glasgow, India also announced its plans to increase non-fossil fuel power generation capacity to 500GW by 2030.

Investor interest in India’s green energy space also stems from the government’s proposal of a minimum share of renewable energy in the overall consumption by an industrial unit or an establishment. Also, in an attempt to soothe investor concerns in the midst of a problem over contracts with Punjab, Gujarat and Andhra Pradesh, the Union government has notified rules for ensuring “timely recovery of costs due to change in law".

This comes in the backdrop of Actis’ plans to invest $850 million in India to build two green energy platforms as reported by Mint earlier.

The first platform will focus on setting up grid-connected solar and wind power parks, while the second will cater to the growing commercial and industrial (C&I) segment.

Actis, which invests only in emerging markets, has committed $2.1 billion in the Indian market so far spanning the energy, financial services and real estate sectors. Some of the other clean energy platforms in India backed by private equity investors include KKR’s Virescent Infrastructure and European alternative asset manager EQT and Singapore’s state investment firm Temasek Holdings Pte.’s O2 Power.

India’s non-fossil fuel-based capacity is on track to surpass the earlier 40% target under its nationally determined contribution (NDC). According to the government, India has already reached 38.5% of its installed power capacity from non-fossil fuels and this will go up to 66% by 2030. Also, India has already reached an emission reduction of 28%.

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