Mumbai : India Grid Trust (IndiGrid), the KKR-owned first Infrastructure Investment Trust (InvIT) in the Indian power sector, is in advanced discussions to acquire India portfolio of Fotowatio Renewable Ventures (FRV), the Madrid-based developer, in a deal worth Rs.750 crore.
FRV, owned by Abdul Latif Jameel Energy and Environmental Services, owns a 135 megawatt (MW) solar power project in Andhra Pradesh.
FRV had been in discussion with various power producers, investors such as Hero Future Energies, EverSource and Edelweiss to sell India assets, which did not fructify. FRV, which was acquired by the Saudi Arabia-headquartered Abdul Latif Jameel Group in April 2015, has sold out several businesses worldwide.
In 2016, FRV had been awarded power purchase agreement (PPA) by Solar Energy Corporation of India Limited (SECI) under the National Solar Mission program at a tariff of Rs.4.43/unit.
Mail sent to FRV did not elicit any response till press time while an IndiGrid spokesperson declined to comment.
KKR has been betting big in Indian infrastructure space since 2019.
As its first infra bet in India, KKR had joined hands with Singapore’s Infra Holdings Pte to manage the infrastructure investment trust (InvIT) of Sterlite Power Transmission – India Grid Trust, in May last year.
KKR had invested Rs 1,084 crore and GIC invested Rs 980 crore. KKR, a cosponsor of IndiGrid owns 74% stake in Sterlite Investment Manager, which manages the trust.
India Grid had acquired about five transmission projects from its sponsor Sterlite Power Ventures for a total enterprise value of Rs 11,539 crore ($1.65 billion).
Presently, IndiGrid owns 10 operating projects consisting of 25 transmission lines with more than 6,080 ckms length and 7 substations with 10,735 MVA transformation capacity. IndiGrid has assets under management (AUM) worth Rs.13,300 crore ($1.80 bn).
Several of the foreign, local entities are in the process of selling operational solar assets in India following the worst liquidity crisis faced in last few years.
Long pending dues, from loss-making discoms, has worsened the liquidity position of the power producers in India.
Total outstanding dues owed by distribution firms to the power producers in India increased over 36% year-on-year to Rs1.3 lakh crore in July 2020.
Moody’s Investor Service noted in May that the power demand to contract significantly in fiscal 2021 in the country. Power companies might face longer cash conversion cycle. Policy actions could be credit negative in the near term.
India has set a target of having 100GW of solar energy by 2022. As of August 31, 2020, the total installed solar power generation capacity stood at 35.73 GW in the country out of the total renewable energy of 88.79 GW.