Actis acquires two solar assets in India

The transaction was worth INR23 billion ($306 million), according to The Economic Times.

Actis will add the projects – situated in Andhra Pradesh and Madhya Pradesh – to its existing portfolio. The UK-headquartered energy-focused PE firm currently owns Sprng Energy, an Indian renewable energy platform it helped launch in 2017. Sprng operates 648MW of wind and solar projects, with a further 1,100MW in the pipeline.

Acme, the country’s largest independent solar power company, was established in 2003 by Manoj Kumar Upadhyay, formerly a managing director at Adhunik Power Systems. It has 47 operational solar photovoltaic modules and claims to have a diversified renewables portfolio of up to 5 gigawatts spread across multiple states.   

The company recently reneged on a power purchase agreement with state-backed distributor Solar Energy Corporation of India citing difficulties in procuring land and a fall in nationwide energy demand due to COVID-19. Previously, the contract was billed as the cheapest in the world. 

“India has a lot of potential for solar power, and Acme is very well poised to tap this potential and create value for utilities and consumers by offering daytime power at very low cost. Asset divestment to long-term investors like Actis helps unlock equity value and aid our growth plans in India,” said Upadhyay.

Actis said the assets would help it contribute to India’s stated goal of hosting 175GW of renewable energy assets by 2022. As of July, the country had achieved 87.6GW in installed capacity, 40% of which comes from solar.

However, an anticipated fall in annual energy demand, the worsening financial position of distributors, and an increase in import restrictions for solar modules will make it difficult for the country to reach the energy transition goal.

Actis invests in the renewables sector in India through two funds. Globally, it has backed companies will a collective production capacity of more than 24GW of renewable power.

Previous activity this year in Indian energy includes an acquisition of solar assets by KKR, the launch of a Temasek-backed renewable energy platform, and several fundraising efforts by transmission network operator IndiGrid. Last month, oil giant BP also agreed to invest $70 million in an energy fund co-managed by Indian private equity firm Everstone.

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• Topics
• South Asia
• Cleantech
• Buyouts
• India
• renewable energy
• Actis Capital