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Torrent, Sembcorp in fray to buy Vector Green Energy – EQ Mag Pro

Torrent, Sembcorp in fray to buy Vector Green Energy – EQ Mag Pro


Torrent Power Ltd and Singapore-based Sembcorp Industries Ltd. US private equity firm Global Infrastructure Partners (GIP) are in the fray to buy Indian clean energy platform Vector Green Energy, said two people aware of the development, which is set to become a ready for Largest clean energy deal in India.

Standard Chartered is running the sale process for the transaction, which is expected to have an equity value of 3,000 crore and an enterprise value of approx. 5,000 crore, the people cited above said, requesting anonymity.

Vector Green Energy has 700 megawatts (MW) of operational and 300 megawatts of wind and solar power assets under construction, with another 1 gigawatt (GW) slated for investment in the pipeline. Some of these properties were acquired from IDFC Alternatives in 2018 and RatanIndia Group in September 2020.

Torrent and Sembcorp have been active in India’s green energy sector. While Torrent has an installed power generation capacity of 4.16 GW, of which 1.06 GW is renewable capacity, Sembcorp’s India operations have a portfolio of 5 GW through its units Sembcorp Energy India Ltd and Sembcorp Green Infra Ltd. Sembcorp has a global portfolio of 15 GW, of which 5.7GW is in renewable energy. A GIP spokesperson said in an emailed response: “As a policy, we do not comment on market speculation.”

While a spokesperson for Standard Chartered declined comment, spokespersons for Vector Green Energy and Sembcorp Industries did not respond to emailed queries on Monday evening.

Mint reported on March 28 the appointment of Standard Chartered by GIP to conduct the sale of Vector Green Energy, as the Andhra Pradesh High Court ordered the state government to reopen contracts under the previous N Chandrababu Naidu government. The decision was ruled in favor of renewable energy developers. , “There are no big green energy platforms or big assets left. Hence, increasing investor interest,” said one of the two people, requesting anonymity.

India has an installed renewable energy capacity of 160.92 GW under implementation of 74.76 GW. Global investors have been active in India’s green energy sector as the country undergoes an energy transition, and the decline seen during the deadly second wave of the pandemic has led to a slump in electricity demand. The peak power demand in the country touched a record high of 211 GW on June 9.

Investor interest remains the same, given the government’s efforts to make government-run power distribution companies (discoms) financially sound, Prime Minister Narendra Modi has drawn attention. Gencos and discoms have dues worth Rs 2.5 trillion. State-run Power Finance Corporation Limited and Unit REC Limited are expected to lend about 1.45 trillion to discoms under the one-time settlement scheme. As per the plan, the dues of the discoms including late payment surcharge will be converted into Equated Monthly Installments (EMIs) of 12-48 months depending on the quantum of dues. The Vector Green Energy deal is one of several large clean energy deals in India that have either been finalized or are in the pipeline.

Malaysia’s state-run oil and gas company, Petroleum National Bhd or Petronas, is in talks with ReNew Energy Global PLC to set up green energy projects in India through joint ventures. In addition, private equity firm Actis LLP has won a winning bid for 400 MW of solar power assets of Kolkata-based Atha Group at an enterprise value of around $270 million, as reported earlier by Mint.

Recently, a consortium led by BlackRock, the world’s largest asset manager and UAE sovereign wealth fund Mubadala Investment Company, has agreed to invest. 4,000 crore for 10.53% stake in Tata Power Renewables.

Source: PTI
Anand Gupta Editor - EQ Int'l Media Network