Dubai-based private equity investor Abraaj Group and French multinational utility company ENGIE will develop a wind power platform in India, as they seek to expand their presence in the country's growing renewable energy space.
The wind power platform has identified a robust pipeline of wind power projects representing over 1 gigawatt (GW) in several states, ENGIE said in a statement. It did not, however, disclose the financial details.
"The Indian renewables sector has seen strong growth in recent times and we expect demand for power across the country to continue to increase," said Saad Zaman, partner at Abraaj Group, "Wind power generation is approaching grid parity and offers a competitive solution to lower average power pool prices," he said.
Sébastien Arbola, CEO of ENGIE Middle East, South & Central Asia and Turkey, said the platform is fully in line with its commitment to provide clean and renewable energy for all.
The Abraaj Group has invested over $1 billion in 10 projects globally in the energy sector. In 2015, Abraaj had partnered with Indian conglomerate Aditya Birla Group to build a 1 GW solar energy platform in India.
ENGIE is also engaged in a diverse set of activities in India. Through its parent company and subsidiaries, ENGIE is active in the country in power transmission and distribution as well as gas pipeline sectors. It is also present in the solar photovoltaic (PV) space with 800 megawatts (MW) of capacity in operation, construction and advanced development. Besides, it has made its first entry into the distributed energy segment in the country, it said.
Investor activity in renewable energy space
The renewable energy space in India has witnessed a lot of activity since the government set an ambitious capacity-addition target of 175 GW across wind and solar by 2022.
This includes 100 GW of solar and 60 GW of wind power capacity. India’s renewable energy capacity is currently around 44 GW.
Renewable energy has been a preferred asset class for developers and investors because of falling solar panel prices and improving wind technology yields, according to Vikas Dawra, senior president and global head, investment banking, Yes Securities.
Some of the world’s biggest pension funds, including Canada Pension Plan Investment Board and Caisse de dépôt et placement du Québec, are also scouting for deals in India’s solar power sector.
Meanwhile, private equity firm Actis, which has been active in the renewable energy space in India, has hired a banker to sell the assets of portfolio firm Ostro Energy as part of its commitment to return capital to its investors and focus on its second green energy platform in India, Solenergi Power Pvt. Ltd.
Another PE firm that has a growing renewable energy business is IDFC Alternatives. The asset management arm of infrastructure-focused lender IDFC Ltd entered into a definitive agreement with First Solar Power India Pvt. Ltd and affiliates of the US-based First Solar Group to acquire 190 MW of solar power assets across seven projects in India through its second infrastructure fund last week.