French firm EDF Energies Nouvelles and Luxembourg-based EREN Renewable Energy may exit Acme Solar , their joint venture in India with Acme ACleantech Solutions, industry sources said. “EDF and EREN are parting ways with Acme,” a person aware of the development said. “Maybe the foreign players had a different set of expectations from Acme,” the person told ET. EDF and EREN hold 25% stake each in the company with Acme holding the rest. An industry consultant said the foreign partners had issues with Acme Solar’s aggressive bidding, and project execution.
Formed in December 2013 Acme Solar is now the country’s second largest solar developer after SunEdison with nearly 1500 MW of solar assets across 15 states – 600 MW already commissioned, 500 MW under construction and 400 MW in the pipeline. Nikhil Dhingra, chief financial officer at Acme Solar Holdings, denied the partnership was breaking up, but added that the company can manage even without foreign partners. “There is no plan or attempt on EDF’s or EREN’s part to get out of the Indian market or anything like that,” he said. He, however, acknowledged some differences in the approaches of Acme and its foreign partners. “For them India is one of many markets, for us it is the only market,” he said. “We have a much higher appetite for exposure in India. They have their yearly targets of investing a particular amount. They have a different criteria for tariffs. Their risk appetite is different,” Dhingra said. But he emphasized that the partnership has helped Acme. “They are strategic investors and not just financial investors,” he said. “Strategic partners play a role in procurement, implementing best practices (and) maybe in getting ECB (external commercial borrowing) financing, apart from putting in funds,” Dhingra said. A spokesperson of EDF India refused to comment on the matter. An email to EREN did not elicit any response as of press time Sunday. EDF Energies Nouvelles is the renewable energy arm of the French government-owned utility Electricite De France SA, which operates 6,538 MW of solar and wind energy plants worldwide. EREN has 400 MW of renewable energy projects globally and is developing 1000 MW more. The two firms have so far invested around Rs 300 crore in the joint venture. Dhingra said Acme would be unaffected even if the partners pulled out. “We have a large pool of our own assets which is much bigger than the JV we have formed,” he said. “Out of the 1500 MW, only about 260 MW in the operational or construction stage and another 360 MW of pipeline assets are part of the partnership. The rest is our own. In March this year we operationalised around 300 MW which are held entirely by us. Last month, we won 350 MW in NTPC auctions in which EDF and EREN had no participation,” he said. Opinion in the industry was divided over the likely impact of the foreign partners exiting Acme Solar. “Acme will need another investor which will not be easy to find after such an incident,” said a renewable energy developer. Some others, however, felt Acme had no reason to worry. “My understanding is that Acme has already got a financial investor and will be able to go solo,” said an industry analyst. “Acme has been bidding aggressively and I’m confident it can stand on their own if need be,” the person said. Dhingra claimed Acme could easily get investors if required, but there was no urgent need. “Our principal company Acme Cleantech, which our sponsors own fully, has a yearly turnover of Rs 2,000 crore,” he said. “We have a solar EPC business. We have a telecom business too. All combined our turnover is around Rs 2,600 crore. We can fund our own projects,” he said.
Source: ET Bureau