Mumbai: US-based SunEdison Inc. has agreed to acquire Continuum Wind Energy Ltd, a Singapore-based company with assets in India, for an undisclosed sum.
Continuum owns and operates 242 megawatts (MW) of wind power plants in Maharashtra and Gujarat, besides a 170 MW wind power unit under construction in Madhya Pradesh. It has more than 1,000 MW of wind power plants in development across six states in India, said a statement from SunEdison.
The financial details of the deal were not disclosed. However, a 2 June report in Economic Times said SunEdison’s non-binding offer values Continuum Wind Energy at `3,720-3,900 crore ($620-650 million), inclusive of its debt.
Last year, SunEdison acquired US-based First Wind for $2.4 billion, in one of the largest mergers and acquisitions deals in the renewable space.
Continuum Wind Energy is controlled by Morgan Stanley Infrastructure (MSI), an infrastructure-focused private equity fund. In 2012, Morgan Stanley acquired majority stake in Continuum, founded by Arvind Bansal, an investment banker and Vikash Saraf, former director of Essar Group.
“India is a core market for SunEdison and offers growth opportunities in wind and solar energy,” said Ahmad Chatila, president and chief executive officer at SunEdison, adding, “With the acquisition of Continuum, a leading wind energy company in India, we have added significant assets and a skilled wind development team to drive further growth in our renewable energy development platform.”
“The rapid growth in India’s renewable energy market offers good opportunities for acquirers such as SunEdison, especially of operating and under construction projects. These can be quickly added to their Yieldco platform, a low-risk model which is actively being adopted beyond the US now. We expect to see more such deals as early stage developers and financial investors seek to monetise in the present boom,” said Kameswara Rao, partner and leader, energy, utilities & mining at PricewaterhouseCoopers Private Limited.
In 2011, Goldman Sachs Group Inc acquired a controlling stake in ReNew Power Pvt Ltd with an equity investment of up to `1,000 crore. Last month, Mint reported ReNew Power’s plans to raise another $150 million to meet expansions. ReNew Power was launched in 2011 by Sumant Sinha, chairman & chief executive officer.
M&As in the renewable energy sector in Asia Pacific has grown 22% in 2014 to $6 billion, driven by JSW Energy Ltd’s $1.6-billion acquisition of two hydro power assets of Jaiprakash Power Ventures Ltd along with a $1.1-billion deal in China, said a report from PwC in January.
In November last year, Sajjan Jindal-controlled JSW Energy announced the acquisition of two hydroelectric projects from Jaiprakash Power Ventures for `9,700 crore in cash.
JSW Energy’s acquisition was the second largest renewable energy deal globally in 2014.
Globally, M&A activity in the renewable energy sector has hit a new high for the decade with the value of deals reaching $243.1 billion in 2014, a growth of 70% year-on-year.
The Indian government has taken steps to improve the generation of clean energy.
In his budget speech, finance minister Arun Jaitley spoke about achieving the 175,000-megawatt target set for clean energy installations by 2022. According to him, this would comprise 100,000 MW of solar power, 60,000 MW of wind power, 10,000 MW of energy from biomass and 5,000 MW from small hydroelectric projects. Currently, India’s clean energy capacity is 33,000 MW.
Source: Mint; 17 June 2015