Private equity company Actis Llp has shown interest in acquiring US-based Global Infrastructure Partners’ (GIP) Indian clean energy platform Vector Green Energy, two people aware of the development said.
The potential deal is likely to have an equity value of around $300 million, the people said on condition of anonymity, which comes at a time when India’s solar power tariffs are rising again.
There is growing investor interest in India’s green energy space in the backdrop of an uptick in the country’s electricity requirement. Also, in a reaffirmation of India’s push for green energy sources, solar and wind power generation recorded an all-time high of 43.1 gigawatts (GW) on 27 July.
GIP is an infrastructure-focused global private equity player and has 700 megawatts (MW) of wind and solar energy assets under Vector Green Energy, most of which it had bought from IDFC Alternatives in 2018. Vector Green had also acquired 306MW of solar projects from RattanIndia Group previous September.
“GIP is looking to exit Vector Green and is in talks with Actis,” one of the two people cited above stated.
As per a report of 9 July last year, GIP’s plans to sell Vector Green. Vector Green lately raised Rs
1,237 crore by selling green bonds. A Vector Green spokesperson in an emailed response stated, “Please note that we keep receiving offers for partnerships at Vector Green, but any deal news at this point in time is completely misplaced and speculative. The company management’s focus continues to be disciplined and cashflow oriented growth.”
“We are not able to comment on market speculation,” an Actis spokesperson said in a response.
This also comes in the backdrop of large deals returning to India’s green energy space. Canadian pension fund Ontario Municipal Employees’ Retirement System last week announced its plan to acquire 19.4% stake in Azure Power Global Ltd for $219 million from World Bank’s private-sector development arm International Finance Corporation (IFC) and IFC GIF Investment Co.
In July, Thailand’s state-owned energy major PTT Group proclaimed its acquisition of 41.6% stake in Avaada Energy for around $454 million.
After hitting a record low of Rs 1.99 per unit in December, India’s solar power tariffs have firmed up in recent auction rounds. While the lowest quoted tariff for Rewa Ultra Mega Solar Ltd’s Agar solar park and Shajapur solar park was Rs 2.44 per kWh and Rs 2.33 per kWh, respectively, Maharashtra State Electricity Distribution Co. Ltd’s auctions saw a lowest quoted winning bid of Rs 2.42 per kWh.
Actis, which invests only in emerging markets, has taken significant bets on India’s green economy. Lately, it signed an agreement to buy 500MW of solar projects in India owned by Finland’s state-controlled power utility Fortum Oyj for around €280 million.
It plans to expand its renewable energy platform in India, Sprng Energy, to 2GW capacity.
Actis also plans to invest $850 million to set up two green energy platforms for setting up grid-connected solar and wind power parks, and the commercial and industrial segment, respectively. Actis has been present in this space and had earlier sold Ostro Energy to ReNew Power in 2018 at an enterprise value of $1.5 billion.
GIP manages $70 billion of assets, consisting 15GW of renewable projects.
