Bulge-bracket global investors, including Canada’s Brookfield and the UK’s Actis, are in separate discussions to acquire some solar energy assets from Acme Cleantech Solutions, a cash-strapped Indian power producer. Acme has 2.5 GW of operational assets and 3 GW under construction. Although Acme does not want to totally exit the business, selling a part of its portfolio of around 300 MW will help fund additional capacity and pay off debt obligations.
In 2017, Piramal Finance Ltd, a subsidiary of Piramal EnterprisesNSE -3.85 % Ltd, sanctioned Rs 700 crore in debt to Acme Solar. This line is expected to be due shortly, a person aware of the proposed sale process told ET. Acme, Brookfield and Actis declined to comment.
The Rs 1,200-crore likely deal would be Brookfield’s second buyout in India’s clean energy space. At present, Brookfield has a total renewable portfolio of 510 MW here. It is a leading global investor in renewable power, with 18,000 megawatts of generating capacity and $47 billion worth of assets under management. Actis, which has a strong presence in the Indian renewable energy space through its platform Sprng Energy, plans to acquire Acme assets through its global infrastructure vertical, said an industry source aware of the negotiations. Its infrastructure vertical in India is headed by Sumit Sen, former executive director with the Goldman Sachs Principal Investment Area and a key man behind GS’ investment in Renew Power.
Earlier, Actis was in talks to buy solar assets of debt-laden Essel Infraprojects Ltd, although the discussions didn’t result in a purchase. The assets were sold to Adani Green Energy later.
Sprng Energy has a capacity of 750 MW (AC) solar projects, 797 MW of wind power projects under execution and 194 MW (AC) solar projects under operation, totalling 1.7 GW in India. The government has a target to add 175 GW of renewable energy into the grid by increasing solar power generation to 100 GW and wind to 60 GW by 2022, and the rest through small hydropower and biomass-based projects.
Tapping the potential in the clean energy sector, global and domestic investors have been looking at M&As. However, the renewable energy sector has been facing multiple challenges due to regulatory hurdles and lower tariffs. There are long delays in payments by state distribution utilities, execution delays for projects bid out over two years due to completion issues, land acquisition difficulties, and transmission connectivity and financing challenges, said a December report by ICRA.
Source: Economic Times