Inspired by the success of its existing Indian renewable energy platform, Ostro Energy, global private equity fund Actis Llp now plans to promote another green energy platform.
Accordingly, it has initiated talks with SolarArise India Projects Pvt. Ltd.
In the process the global private equity fund is signalling that it sees enormous opportunity in the emerging green economy in the country.
Ostro Energy is among the energy platforms that Actis has created globally, following Globeleq Meso America in Central America, Zuma Energia in Mexico, Aela Energia in Chile and Atlantic Renovaveis in Brazil.
“Actis is forming a new fund. After Ostro Energy it now plans to set up a new renewable energy platform in India,” said a person aware of the development, requesting anonymity.
Another person, who also didn’t wish to be identified, confirmed the development.
SolarArise has been set up by former KPMG partner Anil Nayar, and former Boston Consulting Group’s executives Tanya Singhal and James Abraham. It has raised over Rs200 crore from Core Infrastructure India Fund Pte Ltd, managed by Kotak Mahindra Group and Global Energy Efficiency and Renewable Energy Fund, a fund of funds advised by European Investment Bank Group.
The firm plans to set up around 250MW of solar projects.
Experts say investors’ interest in the sector is primarily policy driven.
“There has been a strong push from the government. The developers are enthused by the regulations and the state governments as well are supporting the initiative. The sector also offers them attractive returns compared to what is offered elsewhere,” said, S. Seshadri, former member at Central Electricity Authority, India’s apex power sector planning body.
An Actis spokesperson declined comment. Anil Nayar, director at SolarArise, said over the phone, “I will not comment on any discussion that we are having with potential investors.”
Of the $7.8 billion deployed by Actis, 26% has been invested in the energy sector. Actis invests exclusively in emerging markets with a focus on investments in energy and real estate.
Ostro Energy currently has 234MW of operational wind projects and 350MW of wind and solar capacity under construction. Actis has committed $280 million for Ostro to build 1,000MW of renewable energy projects by 2019.
India, the world’s third largest energy consuming economy after the US and China, plans to achieve 175GW of renewable energy capacity by 2022 as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in December 2015.