Malaysia’s Petroliam Nasional Berhad (Petronas), Abu Dhabi-based energy company Masdar Clean Energy and Singaporean alternate energy firm Sembcorp are in talks to acquire up to 30% of Hero Future Energies, the renewable energy arm of the Hero Group, said people with knowledge of the matter.
Hero is looking to raise as much as $300 million, valuing the renewable energy firm at around $1 billion. JP Morgan is advising Hero Future on the stake-sale process. International Finance Corp. (IFC), the private sector investment arm of World Bank, holds a minority stake in Hero Future with an investment of $125 million made in 2017.
Petronas and Masdar have submitted bids in the range of $300-325 million, said one of the persons mentioned above, a sign of continued strategic interest in India’s power and alternate energy space, they said. Petronas, Masdar, Sembcorp and Hero Future Energies CEO Sunil Jain didn’t respond to queries. Launched in 2012, Hero Future Energies is led by Rahul Munjal and is one of the top five renewable companies in the country. It currently has installed solar and wind power capacity of 1.2 GW while another 500 MW is being built and 300 MW more is in the pipeline. It has a presence in 10 states with an operating asset base across wind, solar photovoltaic (grid connected) and rooftop plants.
In rooftop solar, the company has plans to implement 100 MW by FY19 and aims to build a portfolio of 3.5 GW by 2022. Masdar Clean Energy has invested around $2.7 billion in projects around the world in the past 10 years, with 1GW of installed capacity and 700 MW under development. Masdar’s renewable energy projects span the UAE, Jordan, Mauritania, Egypt, Morocco, the UK, Serbia and Spain. The Malaysian government-owned $53 billion Petronas has been evaluating an entry into renewable energy production for a year.
Sembcorp, which recently commissioned 250 MW wind capacity earlier this month, has been looking to scale up its alternate energy production in the country. The firm’s solar capacity stands at 35 MW, out of its total renewable energy capacity of 1.7 GW. According to various reports, the renewable sector is poised to witness robust growth as the government is targeting a capacity base of 175 GW by 2022 from the current 72 GW. The latter includes 34 GW of wind and 23 GW of solar capacity, around 20% of the country’s total installed power capacity.
India’s renewable energy generation capacity is expected to reach 140 GW by FY23 and solar power will account for around a half of this followed by wind at 40%, said a recent report by research and ratings agency Crisil. India’s pledge to reduce carbon emissions and availability of foreign funding at attractive rates will support growth of the renewable energy sector, it added. The installed capacity of the renewable energy sector has witnessed a compound annual growth rate (CAGR) of 18.5% between FY14 and FY18.
Source: Economic Times