NEW DELHI: American investor Global Infrastructure Partners (GIP) is in talks to buy the Indian solar power business of French energy firm Engie SA in a deal potentially worth around $500 million, a person aware of the development said.
GIP is interested in Engie Solar, which has an 1,100 megawatt (MW) solar portfolio in India, the person said on the condition of anonymity. Of this, 740MW is operational. Rothschild and Co. has been mandated to find a buyer for the assets.
Mint had earlier reported that private equity (PE) fund Actis Llp and Edelweiss Infrastructure Yield Plus Fund were in talks to buy the French firm’s Indian solar power business.
With the newly-elected Narendra Modi government articulating its vision for reliable and uninterrupted power supply to households in its second term, along with a focus on green energy sources, the interest in India’s emerging green economy continues unabated. Last week, sovereign wealth funds GIC Holdings Pte Ltd and Abu Dhabi Investment Authority agreed to invest $495 million in Greenko Energy Holdings, in one of the largest funding rounds by an Indian clean energy producer.
In an emailed response, Engie India manager Malcolm Wrigley declined to comment on “market speculation”. A GIP spokesperson, in an emailed response said: “We don’t comment on market speculation.”
M.K. Sinha, managing partner and co-head, GIP India, did not respond to Mint’s queries.
An external spokesperson for Rothschild said: “I have been mandated to post to you that Rothschild & Co. does not comment on market speculations.”
GIP has been present in the Indian clean energy space and led a group of investors to acquire Equis Energy for $5 billion in October 2017. The sale included liabilities of $1.3 billion and the Indian portfolio of the Singapore-based renewable energy developer, comprising green energy platforms Energon and Energon Soleq.
GIP has also set up an office in India, its first in an emerging economy. It also acquired the infrastructure investment business of IDFC Alternatives Ltd and plans to raise an India-focused fund, besides investing in buyout opportunities.
The two infrastructure-focused funds of IDFC Alternatives—India Infrastructure Fund and India Infrastructure Fund II—which have a total corpus of a little over $1.8 billion, have now transitioned to GIP. Globally, GIP manages over $51 billion for its investors.
Mint had on 19 March last year 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 115.3 gigawatts (GW). Of this, 22% is from renewable energy sources. Engie plans to set up capacity of 2GW in India by 2019. It also has a 280MW wind power portfolio.
India has an installed renewable energy capacity of 74.79GW, of which solar and wind power account for 25.21GW and 35.14GW, respectively.
India is running the world’s largest renewable energy programme and plans to achieve 175GW of renewables capacity by 2022 as part of its climate commitments. The government plans to award a mammoth 100GW of solar and wind contracts by March 2020. Given the ambitious 2022 target, the government’s strategy is to complete the bidding process by March 2020 so that developers have enough time to construct these projects.