In what may rank among the largest green energy deals in India, private equity firm Actis Llp has started the sale process of its renewable energy platform in India—Sprng Energy—and will be shortly appointing a banker for the proposed sale, said two people aware of the development.
Sprng Energy is expected to have an operational portfolio of 1.7 gigawatt (GW) by year end and has 400 MW under construction. It has a 2.5 GW pipeline.
This follows Actis’ earlier deal wherein it sold Ostro Energy Pvt. Ltd to ReNew Power Ventures in 2018 at an enterprise value of $1.5 billion. The proposed deal for Sprng Energy comes in the backdrop of a growing focus on environmental, social and governance (ESG) investing.
“The banker to run the sale process will be appointed shortly,” said one of the two people cited above requesting anonymity.
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.
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. These investments will be made from Actis Energy 5 LP fund.
Queries emailed to an Actis spokesperson on Tuesday evening wasn’t immediately answered.
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.
The global investors interest in India’s green economy continues unabated despite the coronavirus pandemic, with India’s power demand being on an upward trajectory. A recent case in point being Canadian pension fund Ontario Municipal Employees’ Retirement System’ (OMERS) purchase of 19.4% stake in NYSE-listed Azure Power Global Ltd. for $219 million from IFC and IFC GIF Investment Company. Recently Thailand’s state owned energy major PTT Group also announced its acquisition of 41.6% stake in Avaada Energy Pvt Ltd for around $454 million.
This comes in the backdrop of India’s solar and wind generation recording an all-time high of 43.1GW on 27 July. India has also crossed the 100 GW milestone of installed renewable energy capacity. The pipeline looks promising with a total of ₹4.7 trillion has been invested in the country’s renewable energy space in the past six years, with an expected ₹1 trillion investment opportunity annually till 2030.
India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity. According to the Central Electricity Authority, by 2030, the country’s power requirement would be 817GW, more than half of which would be clean energy.
