EverSource Capital, the green infrastructure joint venture in private equity fund Everstone Group and UK-based Lightsource BP, is in talks to acquire a minority stake in Ayana Renewable Power, which works in India and South Asian markets.
EverSource plans to invest about $100 million in Ayana, backed by CDC Group Plc, the development finance institution owned by the UK government, as per two people aware of the development.
Spokespersons of Everstone and CDC declined to comment.
By 2022, Ayana Renewable Power plans to add at least 2,000 MW of renewable power in countries such as India, Bangladesh, Nepal, Bhutan, Sri Lanka, and Myanmar.
Ayana is developing 500 MW of capacities in two solar parks in Andhra Pradesh—at Anantapur, which is due to begin commercial operation in August, and at Kadapa, where the commercial operation will commence in June 2020. The company has entered into a 25-year power purchase agreement (PPA) for the Anantapur plant with NTPC and with Solar Energy Corporation of India for the Kadapa plant.
“The long-duration nature of PPAs provides revenue visibility for Ayana. Moreover, the new PPAs include provisions to compensate developers in case of constraints in grid availability, transmission infrastructure and backdowns, which is a positive for power producers,” a recent ICRA report said.
Ayana chairman is PJ Nayak, former chairman of Axis Bank.
Last year, CDC had backed former Green Infra chief executive Shivanand Nimbargi to set up an independent wind and solar energy platform to cater to Indian and other South Asian markets. Nimbargi, who has over 29 years of experience, was instrumental in increasing Green Infra’s operational capacity from 150 MW to 700 MW.
CDC Group has committed an investment of Rs 800 crore for Ayana Group. CDC, which has been investing in India since 1987, had put in about $1.7 billion till date.
In April last year, Everstone Group and Lightsource BP had formed EverSource Capital to fund green energy businesses in India. The platform set up Green Growth Equity Fund with a target of $700 million where the UK government and India’s National Investment and Infrastructure Fund will be co-anchors with a commitment of $160 million each. EverSource had roped in Satish Mandhana, former managing partner and chief investment officer of IDFC Alternatives, at the same designation.
The infrastructure sector in India has seen a number of renewable power producers in the market as part of fundraising, either by selling a minority or a controlling stake.
EverSource was one of the contenders to acquire 135 MW project of Madrid-based developer Fotowatio Renewable Ventures (FRV) in India. At present, International Finance Corp-backed Hero Future Energies is in advanced talks to buy FRV assets.
Hero Future Energies, the renewable energy arm of the Munjal family’s Hero Group, is another renewable power producer looking for an investor. Abu Dhabi’s Masdar Clean Energy has entered into exclusive talks to acquire a 30-35% stake in Hero Future Energies, ET reported on January 22.
Other major renewable energy producers which are raising money covered Acme Solar and Mytrah Energy. In May, Kiran Energy Solar was acquired by Hinduja Power Corporation for Rs 1,000 crore.
Rating company Icra, which has a stable outlook for India’s clean energy sector, expects a capacity addition of 10 GW of renewable energy in FY2020. India currently has about 72 GW of installed renewable energy capacity, including 34 GW of wind and 23 GW of solar, which is same as 20% of the country’s total installed power capacity. The government is targeting a renewable energy capacity base of 175 GW by 2022, of which 100 GW will be solar and 75 GW wind.