Clean energy-focused private equity fund FE Clean Energy Group is investing $40 million in the NSL Renewable Power Pvt Ltd, part of the Hyderabad-based NSL Group. NSL Renewable Power plans to use the funding for equity commitments for its upcoming wind, hydro and solar power projects.
This infusion comes just as International Finance Corporation (IFC) has decided to increase its potential investment in NSL Renewable Power from $20 million to $25 million. The World Bank arm plans to invest through equity or quasi-equity instruments.
NSL Renewable Power, which was demerged from the group’s flagship Nuziveedu Seeds Ltd, plans to build a capacity of 1000 MW by 2015. Nuziveedu Seeds, the largest seed company in India with a turnover of more than Rs 900 crore, is backed by private equity major Blackstone.
The company has around 162 MW of installed capacity, which includes a 50 MW wind farm, expected to be commissioned later in July. Of its installed capacity, 150 MW is in wind energy while the rest is generated by two biomass plants of 6 MW each.
NSL Renewable Power’s project pipeline includes two medium-scale hydro power projects (100 MW and 44 MW) and two small-scale hydro power units (5 MW and 6 MW) in Himachal Pradesh. It has recently entered the solar power space and is currently constructing a 20MW project in Gujarat, expected to be commissioned by December, 2011.
The company also has seven wind power projects under development, totalling over 700 MW, which will be implemented over the next two or three years.
What makes this investment even more interesting is that the NSL Group, with a turnover topping Rs 3,500 crore in 2010-11, is the promoter of wind turbine manufacturing firm Regen Powertech Pvt Ltd. This will help ensure generator supply from Regen, which is backed by Everstone Capital’s Indivision fund.
The NSL Group is promoted by Prabhakar Rao, with interests in seeds, cotton, power, textiles, sugar and infrastructure.
“NSL is one of the very unique companies in the renewable energy space to own significant projects in wind, hydro, biomass and solar sectors. Its diversified portfolio is ideally positioned to grow in the next few years and FE Clean Energy is very excited to join NSL on its growth journey to become the largest diversified renewable energy company in India,” said Anand Prakash, managing director of FE Clean Energy Group.
FE Clean Energy Group, which focuses on the clean energy sector in emerging markets, manages over $400 million of capital. Its various funds have invested nearly $100 million in India over the last seven years.
FE Clean’s other investments in India include high efficiency street lighting firm Elpro Energy Dimension and hydel power-focused Bhilwara Energy (another co-investment with IFC).