Singapore-based clean energy firm Equis to sell India portfolio

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Singapore-based renewable energy developer Equis Energy wants to sell its entire India portfolio, comprising green energy platforms Energon and Energon Soleq, two people aware of the development said.

The sell-off plan, an indication of growing consolidation in India’s green energy sector, is part of Equis Energy’s strategic review of its Asian renewable energy portfolio.

“Equis Fund has put up Energon and Energon Soleq for sale. It is seeing a lot of interest. The exercise is underway as part of their Asia portfolio strategy with them planning to run an auction process for the same,” said a person aware of the development, requesting anonymity.

While Energon is focused on wind power projects with 414 mega watt (MW) of operating assets, Energon Soleq works in the solar sector and is developing projects totaling 260MW in Telangana and Karnataka. Additionally 300MW of capacity is also being developed.

“Several firms are interested in these assets,” another person who did not want to be identified said, confirming the development.

This comes in the backdrop of declining green energy tariffs resulting in fewer clean energy deals because of concerns that electricity offtake commitments at higher tariffs may not be honoured.

“Equis Energy (Equis), Asia’s largest independent renewable energy independent power producer (IPP), has appointed Credit Suisse (Singapore) Limited and J.P. Morgan (S.E.A.) Limited as financial advisors and global coordinators to conduct a strategic review with respect to its renewable energy portfolio,” Equis Energy said in an 18 April statement.

As per information available on its website, Equis has raised around $2.7 billion in equity and started Equis Energy in 2012. The firm has 4.7 giga watts (GW) of renewable energy generation assets across Asia-Pacific, with an additional 6.3GW under development in Australia, India, Indonesia, Japan, the Philippines, Taiwan and Thailand.

Analysts have placed their bets on India’s green energy drive although some concerns such as weak finances of the state electricity boards and financing and execution risks remain.

“The Indian renewable energy market will likely see strong growth over many years, as India focuses on greening its energy mix, in line with commitments under the Paris agreement signed in December 2015,” Moody’s Investors Service wrote in a 8 June report.

The competition has intensified with India’s clean energy market witnessing record low tariffs for wind and solar power projects of Rs3.46 per unit and Rs2.44 per unit, respectively.

“Moreover, the recent round of biddings in the case of solar projects have seen a sharp drop in the quoted tariffs, and the ability of such projects to achieve financial closure, given the concerns over the fact that the long-term viability of projects at such tariffs remains to be seen,” the report went on to add.

Some of the deals in play in the Indian clean energy space include sale of Ostro Energy Pvt. Ltd being explored by global private equity fund Actis Llp. Also, IDFC Alternatives, the asset management arm of the infrastructure-focused lender, is in talks to buy First Solar’s 200MW of renewable power assets in India, Mint reported 13 April.

It has been some time since a large deal such as Tata Power Co. Ltd buying the entire 1.1GW renewable energy portfolio of Welspun Energy Ltd for $1.4 billion and Hyderabad-based Greenko Energies Pvt. Ltd acquiring SunEdison’s Indian assets for $392 million last year have taken place in the Indian green energy space.

While spokespersons for Credit Suisse and J.P. Morgan declined to comment, David Russell, Equis board chairman in an emailed statement said, “Equis is considering a restructuring of its entire renewable energy business with longer term investors looking to support management’s growth strategy. The process involves the restructuring of 100% of Equis Energy.”

India has an ambitious clean energy target of adding 175GW by 2022 and has announced its intent to stay the course despite US’s withdrawal from the Paris climate agreement on grounds the deal favoured India and China and was unfair to the US.

Also Read: Singapore-based Equis Energy to invest $300m in two solar plants in Australia

Singapore infra investor Equis to invest $1b to double India renewable portfolio

This article was first published on Livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.