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Petronas, Sembcorp Industries, and JSW Neo Energy are separately considering acquiring Continuum Green Energy (India) Pvt. Ltd in a potential deal that may have an enterprise value of $1.5 billion, two people aware of the development said.

The companies may submit non-binding bids next month for the deal, which is expected to have an equity value of around $600 million, the people said, requesting anonymity. As reported by Mint in November, others in the fray are oil company BP Plc, Norway’s state-run electricity firm Statkraft, and New York-based I Squared Capital. The sale process, managed by Citibank and Deutsche Bank, may involve a 100% stake sale, including the sale of US investment bank Morgan Stanley’s 83% stake in the clean energy platform founded by Arvind Bansal and Vikash Saraf in 2009.

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The interest in Continuum comes amid India drawing up a plan to meet its commitment to net-zero carbon emissions by 2070, increasing non-fossil energy capacity to 500 gigawatts (GW) by 2030 and reducing the carbon intensity of its economy by 45% from the 2005 level.

Continuum has 1.3GW of operational and nearly operational projects, as well as an additional 1.17GW of near-term construction projects in the utility-scale and commercial and industrial segments. North Haven Infrastructure Partners, an infrastructure fund managed by Morgan Stanley Infrastructure Partners, invested $212 million in Continuum in 2012. Recently, GE Energy Financial Services acquired a 49% stake in Continuum’s 148.5 megawatts (MW) Morjar onshore wind project in Gujarat.

A Statkraft spokesperson, in an emailed response, said, “we don’t comment on rumours and speculations about possible transactions in the market".

Spokespeople for Citibank, Deutsche Bank and JSW Energy Ltd declined to comment. Queries emailed to the spokespeople of Continuum Green Energy, Morgan Stanley, Petronas, Sembcorp Industries, BP Plc and I Squared Capital on 21 December remained unanswered till press time.

Continuum’s chief executive officer, Arvind Bansal, also didn’t respond to a text message.

Plans to sell a stake in Continuum have been underway for a while, with Statkraft and SunEdison previously attempting to buy the company. In 2015, SunEdison Inc., then the world’s largest renewable energy firm, agreed to acquire Continuum Wind. The transaction, however, was called off later. ReNew Power Ventures Pvt. Ltd had also evinced interest earlier in buying Morgan Stanley’s majority stake in Continuum Green Energy.

Malaysia’s Petronas has been scouting for opportunities in India’s green economy after it bought Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar power producers, in 2019. New York-based I Squared Capital had invested $150 million in Amplus Energy Solutions Pvt. Ltd in April 2015. Petronas recently set up Gentari Sdn. Bhd to build a renewable energy capacity of 40GW, supplying 1.2 million tonnes per annum of green hydrogen and setting up 25,000 electric vehicle (EV) charging points across Asia-Pacific with a focus on Malaysia and India. Petronas has also inked agreements with Karnataka and Tamil Nadu state governments to invest around 60,000 crore in setting up green hydrogen and ammonia plants.

The interest in Continuum also comes at a time the Centre is putting in place enabling provisions to make the use of clean energy, including green hydrogen, mandatory.

Since announcing the sale of Sembcorp Energy India Ltd, which operates two supercritical coal-fired power projects, to Tanweer Infrastructure Pte Ltd for 11,700 crore in September, Singapore’s Sembcorp Industries has been active in the green energy deal space. Sembcorp, which has invested $4 billion in India, recently agreed to buy Vector Green Energy Pvt. Ltd at an equity value of S$474 million ( 2,856 crore) from Global Infrastructure Partners’ India Infrastructure Fund II.

JSW Neo Energy has been active in India’s green energy sector, recently participating in the largest tech-agnostic energy storage tender by NTPC Ltd. Statkraft, the first foreign investor in India’s hydropower sector, has been present in the country since 2004. Meanwhile, oil firms like BP have been considering entering India’s green energy market, with rivals Shell, Total, and PTT Group already having a significant presence in the country.

The Union budget, to be presented by finance minister Nirmala Sitharaman on 1 February, is expected to announce several measures to support India’s energy transition. These measures include a scheme to encourage the development of grid-scale battery energy storage systems with a budget of 21,650 crore, viability grants of 3,765 crore for such projects, and reduced import duties on parts for building the storage systems.

The Central Electricity Authority estimates that India will require 817GW of power by 2030, with more than half of it coming from clean energy sources.

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ABOUT THE AUTHOR
Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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