IDFC Alternatives, the asset management arm of infrastructure-focused lender IDFC Ltd, is buying three solar projects in Punjab and Rajasthan from engineering and construction company Punj Lloyd, adding to the slew of renewable energy investments its holds on its platform.
Aditya Aggarwal, Partner, Infrastructure, at IDFC Alternatives said that the fund is under active discussions with various developers who are looking at monetising their operational wind or solar projects and are also engaging with various international utilities to explore institutional partnerships.
While we have consciously stayed away from renewables over the past few years, the enthusiasm generated by the government's vision and tariffs approaching grid parity in recent times give much more comfort around long term sustainability of these projects, he added.
“We would like to pace our investments in a more disciplined and diversified manner. We are not competing with the bigger players in the sector who are focused on high risk high return green-field development,” he added.
The fund is looking to add 250 to 500MW in 12 to 18 months through acquisitions, he added.
The Economic Times citing three people in the know reported that the deal is pegged at Rs 100 crore. Aggarwal declined to comment on the deal value.
Rajat Sekhsaria, the Vice President and Business Head, Punj Lloyd Infrastructure Ltd said that the deal is part of the group's non-core sale of assets and monetisation to focus on the core business of engineering, procurement and construction. The enterprise valuation of three assets is between Rs 350 crore to Rs 370 crore. Greenstone Energy Advisors Pvt. Ltd advised Punj Lloyd on the transaction.
Early this month, IDFC Alternatives inked a deal to buy the debt-laden Jindal Steel & Power Ltd (JSPL) to generate cash flows. The deal involved sale of 24MW wind power generating business in Satara to be sold by JSPL to India Infrastructure Fund II, a fund managed by IDFC Alternatives. Parjanya Wind Power Pvt. Ltd, an entity owned by the fund, would complete the acquisition.
For its platform, it would only consider scaled up, operating assets with existing cash flows, Aggarwal had said. Earlier in March 2015, IDFC Alternatives appointed Gaurav Sharma as managing director to bolster its investments in the renewable energy sector.
India’s renewable energy sector – especially wind and solar power – has attracted a clutch of financial and strategic investors, lured by opportunities after the government set ambitious capacity addition targets to cater to the rising demand for electricity.
The government recently sought to boost hybrid solar and wind power projects in the country with incentives and a financing system to increase renewable energy sources while using existing transmission infrastructure and land better.
In its draft policy guidelines, the Ministry of New and Renewable Resources has set a target of achieving 10 GW generating capacity by 2022 through hybrid solar and wind power projects.
As first reported by VCCircle, ReNew Power Ventures Pvt. Ltd, floated by former investment banker and Suzlon COO Sumant Sinha, is acquiring two wind power projects in Andhra Pradesh and Gujarat.
In June, Tata Power Co. Ltd agreed to buy the renewable energy business of Welspun Group for Rs 9,249 crore ($1.4 billion) including debt, making it the top player in the green energy sector in the country. The deal is the largest in India's renewable energy sector thus far.
Morgan Stanley Infrastructure Partners-backed Continuum Wind Energy Pte. Ltd sold a small wind power project in India to Mumbai-based developer Dosti Group.
Last year, Pune-based Simran Wind Project Pvt. Ltd, a unit of Techno Electric and Engineering Company Ltd, sold 44.45MW wind power assets in Tamil Nadu for Rs 215 crore (about $34 million then) to an unnamed buyer.
Another emerging markets-focused private equity major Actis has committed an investment of $230 million (Rs 1,400 crore) to create an India renewable energy platform christened Ostro Energy, which is the fifth such country- or region-specific energy platform of its kind to date, having previously launched Globeleq Meso America in Central America, Zuma Energia in Mexico, Atlantic Renovaveis in Brazil and Aela Energia in Chile.
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