CLP India, one of the largest foreign investors in India’s power sector, is in talks to acquire Morgan Stanley Infrastructure Partners-owned wind energy platform Continuum Wind Energy, two people aware of the development said.
The company, which manages over $4 billion globally, had invested $212 million in Singapore-based Continuum Wind in 2012. Continuum, which focuses on India, was founded in 2009 by Arvind Bansal and Vikash Saraf.
Mint reported in January that Morgan Stanley had appointed investment bank Moelis to seek buyers for the wind platform.
“CLP India has been engaged in talks with Morgan Stanley and is looking to acquire the Continuum platform. Continuum has over 700 megawatts (MW) of operational wind assets and it has a pipeline of almost 1,700MW, making it one of the largest portfolios on sale in the market right now. Acquiring it will add a lot of scale for the buyer,” said the first of the two persons cited above, both of whom spoke on condition of anonymity. Continuum’s portfolio is spread across Maharashtra, Tamil Nadu, Gujarat, Madhya Pradesh and Telangana, he said, adding Maharashtra and Tamil Nadu make up the bulk of its operational assets.
Arvind Bansal, co-founder and chief executive officer at Continuum, declined to comment. “At CLP, as a policy, we do not comment on market speculation,” said a spokesperson for CLP India.
This is not the first time when Morgan Stanley has explored the option to sell the wind platform. In 2015, SunEdison Inc., then the world’s largest renewable energy company, entered into an agreement to acquire Continuum Wind. The transaction, however, was called off later. Mint reported in June 2018 that Bansal was looking to buy back Morgan Stanley’s majority stake in the company, and was in talks with private equity (PE) investors to raise capital for the same.
CLP India is backed by Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), which acquired a 40% stake in the company in September 2018 for around $365 million.
CLP entered India in 2002 by acquiring a stake in the 655MW gas-powered Paguthan Combined Cycle Power Plant in Bharuch, Gujarat. Since then, its portfolio has risen to nearly 3,000MW, which includes over 1,000MW of renewable energy projects and a 1,320MW coal fired power plant in Jhajjar, Haryana.
The Indian renewable energy sector is seeing increasing instances of mergers and acquisitions (M&As), because of falling tariffs and the capital-intensive nature of the business, particularly in the initial stage, making availability of low-cost funds critical for the success of a project.
Mint reported on 12 April that ReNew Power Ltd, India’s largest clean energy company, and state-run power utility NTPC Ltd have shown interest in the ongoing sale process of PTC India Ltd’s wind power business, which includes 290MW of wind assets. Other M&A deals in the works in the sector include Mahindra Susten’s sale of 160MW of solar assets, reported by Mint in April. Fotowatio Renewable Ventures also plans to exit its only investment in the Indian solar power space and Edelweiss Infrastructure Yield Plus Fund is in talks with Engie SA to pick up a significant stake in the French energy firm’s Indian solar business.
Several major M&A deals were struck in the sector last year.
Greenko Group, one of India’s largest renewable energy platforms, has acquired Orange Renewable from Singapore’s AT Capital Group at an enterprise value of under $1 billion and another 385MW of renewable assets from Skeiron Renewable Energy.
Source: Mint