Shell Overseas Investment B.V., a wholly-owned subsidiary of Shell plc (Shell), today signed an agreement with Actis Solenergi Limited (Actis) to acquire 100% of Solenergi Power Private Limited for $1.55 billion and with it, the Sprng Energy group of companies.
ET was the first to report on 10 January 2022, about the deal.
Sprng Energy supplies solar and wind power to electricity distribution companies in India. Its portfolio consists of 2.9 gigawatts-peak (GWp) of assets (2.1 GWp operating and 0.8 GWp contracted) with a further 7.5 GWp of renewable energy projects in the pipeline.
“This deal positions Shell as one of the first movers in building a truly integrated energy transition business in India,” said Wael Sawan, Shell’s Integrated Gas, Renewables and Energy Solutions Director.
“I believe it will enable Shell to become a leader across the power value chain in a rapidly growing market where electrification on a massive scale and strong demand for renewables are driving the energy transition,”Sawan added.
The solar and wind assets Shell acquires through the deal will triple Shell’s present renewable capacity in operation and help deliver its Powering Progress strategy.
An important part of this strategy is to develop a best-in-class integrated power business, which will help Shell to reach its target of becoming a profitable net-zero emissions energy business by 2050.
The transaction is subject to regulatory clearance and is expected to close later in 2022, Shell said.
Shell’s offer, valuing the portfolio at $1.75-$1.8 billion, inclusive of its debt, is said to higher than Singapore’s Sembcorp Industries Ltd, the only other contender who made a binding offer from a field of six who were earlier picked from the original list of 17 for due diligence, Et reported.
The final six included Adani Group, Canadian pension fund CPP Investment Board (CPPIB) and steelmaker ArcelorMittal.
Actis has a significant track record of investing in Indian renewables where it has invested $800 million over the last 7 years to establish Ostro Energy and Sprng Energy with 3 GW of solar and wind capacity.
The UK based Actis had sold its first clean energy platform in India – Ostro Energy to ReNew Power Ventures in 2018 at an enterprise value of $1.5 billion.
The Sprng acquisition will be the biggest renewable energy entry in India by Shell. Till date, Shell has investments in India including owning a 49% stake in solar power producer Cleantech Solar Energy and a minority exposure in Bihar based rural distributed utility company Husk Power Systems via Shell Technology Ventures, its VC arm.
Sprng is an Actis Energy 4 fund investment. In October 2021 Actis announced its latest fund, Actis Energy 5, had closed with $6 billion of investable capital, which will be used to mobilise further capital towards the global energy transition.
“Sprng’s growth and success in India is further evidence of our ability to build market leading sustainable infrastructure anywhere in the world, while still delivering competitive returns for our investors,” said Lucy Heintz, Partner, Head of Energy Infrastructure at Actis.
“Sprng is a best-in-class energy platform delivering clean, reliable power to millions of people across India. We remain committed to the Indian market and its ecological transition, and we hope to deploy a further US$1 billion in the region by the end of 2026,” said Sanjiv Aggarwal, Partner, Energy Infrastructure at Actis.
