Sembcorp, Enfinity, JSW Group make the cut for Mytrah Energy

Barclays Bank is currently managing the sale after an earlier deal with private equity firm KKR fell through

Utpal Bhaskar
Updated4 Apr 2022
Mytrah has an operational portfolio of 2.3GW. 
Mytrah has an operational portfolio of 2.3GW. ;(Photo: Bloomberg)

Singapore’s Sembcorp Industries Ltd, Enfinity Global Inc. and JSW Group have been shortlisted to acquire green energy producer Mytrah Energy India Pvt. Ltd in a deal potentially worth around $2 billion in enterprise value, according to two people aware of the development.

“The negotiations will now start with the three shortlisted firms. The winning bidder will be decided shortly,” said one of the two people cited above who did not want to be named.

Barclays Bank is managing the sale after an earlier deal with private equity firm KKR fell through. Mytrah has one of the largest wind databases in the country and an operational portfolio of 2.3 gigawatts (GW). This includes 1.7GW of wind and around 535MW of solar power. It also has 700MW of projects under development.

The renewed interest in Mytrah Energy follows an Andhra Pradesh high court ruling in favour of renewable energy developers after the state decided to reopen renewable energy contracts inked under the previous N. Chandrababu Naidu government. US PE firm Global Infrastructure Partners is also conducting the sale of its Indian clean energy platform Vector Green Energy and has appointed Standard Chartered for the same.

Vikram Kailas, co-founder and managing director of Mytrah Energy, declined to comment. Spokespeople for Barclays Bank India and JSW Group also declined to comment.

Queries emailed to Sembcorp and Enfinity on Friday afternoon remained unanswered till press time.

As reported by Mint, there is growing interest in India’s green energy space: the world’s biggest asset manager, BlackRock, and UAE sovereign wealth fund Mubadala Investment Co. are in talks to invest $500-200 million, respectively, in a proposed new energy entity—“consumer renewables”— being floated by Tata Power Co. Ltd. The new vehicle will house all the renewable energy assets of Tata Power, including hydropower, and its transmission and distribution business, except coal-fuelled power projects and carbon projects.

Canada’s Brookfield Asset Management Inc. is looking to buy a substantial stake in Mahindra Susten, and Shell Plc is a front-runner to acquire Actis Llp’s Indian renewable energy platform Sprng Energy.

JSW Group and Sembcorp have been trying to boost their Indian green energy portfolio and had earlier shown an interest in Actis Llp’s Indian renewable energy platform Sprng Energy. The others who had signed the non-disclosure agreements (NDAs) for the transaction were BlackRock Inc., Adani Group, Brookfield Asset Management Inc., KKR, Macquarie Group and four Canadian pension funds—Canada Pension Plan Investment Board (CPPIB), CDPQ, Ontario Municipal Employees Retirement System (OMERS) and Ontario Teachers’ Pension Plan (Ontario Teachers).

Enfinity has around 135MW in operating assets and a 3GW pipeline under development. Enfinity Global in February announced the acquisition of a 250MW solar photovoltaic portfolio in Japan.

In 2010, Mytrah got listed on the alternative investment market (AIM) of the London Stock Exchange after raising $80 million from institutional investors. It was delisted in May 2018. At one point, it was also working on a domestic listing.

“The ruling of the Andhra Pradesh high court has been a huge positive for the deal,” said the person cited above.

Around 5.2GW of solar and wind energy projects with an estimated debt exposure of over 21,000 crore in the state were hanging fire due to the state’s decision to reopen renewable energy contracts. Fund-starved state-run electricity distribution companies (discoms) reduced the contractually approved tariff under the power purchase agreements (PPA) to 2.44 per unit for solar projects and 2.43 per unit for wind projects since July 2019. They informed developers that in the event they do not agree to the revised tariffs, PPAs will be terminated. Also, according to the developers, the contracted quantum of wind and solar power in the PPAs was not being procured by the state.

“The judgment assumes significance as it puts an end to an almost three-year-long legal battle between RE (renewable energy) generators and discoms in AP and reinforces the must-run status accorded to RE generators along with the legal principles of regulatory certainty, policy certainty, the sanctity of the bidding process, the sanctity of concluded agreements and promissory estoppel,” according to a 23 March note from Khaitan & Co.

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