State-run hydropower generator SJVN Ltd’s plan to buy PTC India Ltd’s wind power assets has hit a hurdle, two people aware of the development said.
The acquisition is part of SJVN’s efforts to add renewable energy assets to its portfolio and has been in the works since early this year.
The anticipated sale of 288 megawatts (MW) of wind assets at an enterprise value of around Rs 2,000 crore is an attempt by PTC India, the country’s largest electricity trader, to exit its wind power business, owned by its PTC Energy Ltd unit.
As per a report that SJVN had outbid NTPC Ltd to emerge as the preferred purchaser for the wind assets spread across Madhya Pradesh, Karnataka and Andhra Pradesh and received the letter of intent (LoI) for the deal. SBI Capital Markets Ltd is the adviser to PTC India, while EY is the adviser to SJVN.
SJVN procedures to have a 25GW capacity by 2040 and has an operational portfolio of 2GW. The company is executing 27 projects in hydropower, thermal, solar and wind sectors in India, Bhutan and Nepal.
SJVN has also pitched for more hydropower projects from Nepal as part of India’s plan to help
create a South Asia-focused energy security architecture.
“As a company policy, we do not comment on market speculation. Therefore, we have no comments to offer," a PTC India spokesperson stated in an emailed response.
Spokespeople for EY and SBI Capital refused to comment. Queries emailed to SJVN and the Union power ministry spokespeople on Friday morning stayed unanswered until press time.
The deal has a deferred payout structure, given that PTC has significant exposure to Andhra Pradesh, where the tariff was reduced from Rs 4.84 per unit to Rs 2.43 per unit.
KPMG was earlier hired to manage the sale, which saw initial interest from Macquarie Infrastructure and Real Assets, CLP India and Hero Future Energies. Nevertheless, the deal could not be finalized. PTC India then decided to sell the assets to a government-owned firm, with SBI Capital advising it on the sale.
“The deal hasn’t progressed," stated one of the two people cited above, requesting anonymity.
India is leveraging its state-run firms to assist achieve the 450GW capacity target by 2030. As part of the plan, it is awarding projects through viability gap funding (VGF) based competitive bids for 5GW solar project capacity for central public sector units. SJVN lately won a 1GW solar project contract by bidding Rs 2.45 per unit tariff.
India has an installed solar and wind energy capacity of 100.68GW, with an overall installed renewable energy capacity of 147.05GW, consisting of hydropower projects of 46.37GW.
The Indian government is pulling out all the stops to attain a renewable energy capacity of 150GW by 2 October.
As part of the efforts, 2.2GW is to be commissioned by Gandhi Jayanti and an additional 2.32GW by 31 October, in the run-up to the 2021 UN Climate Change Conference, COP-26, which will set up in Glasgow on 31 October.
