Caparo Energy, a Guernsey company that is the holding company for subsidiaries (together, the “Group”) that seek to generate wind power in India.
The Group intends, in due course, to acquire and develop a portfolio of wind farms with a target total annual installed capacity of up to 5,000 MW, which it intends to develop in two concurrent phases: Phase I consisting of 3,000 MW with a target completion date of 2016; and Phase II consisting of 2,000 MW with a target completion date of 2017.
For Phase I, the Company, through its subsidiary Caparo Energy (India) Limited (“Caparo Energy India”), has entered into a business partnership agreement with Suzlon Energy Limited (“Suzlon”), one of the world’s leading wind turbine generator manufacturers, to acquire up to 3,000 MW of wind power generation farms.
For Phase II, Caparo Energy India is in advanced discussions to acquire land and turbines from international vendors in connection with wind power farm development in wind-rich states in India, including Karnataka, Maharashtra, Tamil Nadu and Andhra Pradesh.
Caparo has been talking about its Phase I of the project from May of last year, and once again in January this year when they posted their maiden interim results and announced the details of senior debt facility of Rs 4.5 bn that they had finalized.
This is something they have been saying for about a year now with not much progress. However as Mr. Kailas has himself said, Caparo’s shareholders have deep pockets and hence probably the slow progress.
What is also interesting is that the new S95 and S97 turbines just introduced by Suzlon are supposed to be used at wind farms for Caparo, including in the first 500 megawatts to be completed by next March, Lancy Tauro, a Suzlon deputy general manager, said in an interview with Bloomberg.
With the delivery of the S95 turbines scheduled for the second fiscal quarter of this year, the 500MW installation seems to be a rather ambitious target, given that most IPP’s have a yearly target of about 200-300MW of wind installation in India.
Now according to reports, in what is probably the largest mandate to investment bankers in the renewable energy space, Caparo Energy India, is understood to have mandated investment bankers to raise $150 million (Rs 700 crore) through the private equity route.
The company has an impeccable pedigree, though Caparo Energy India has very little to show for on the ground, where more recent developers have installed much more capacity than Caparo. This could probably be due to financial comfort that the Indian entity has based on their parent and their shareholders.
However it will be interesting to see which of the private equity firm is ready to jump into a wind IPP investment of such a magnitude( $150mn) given that though the company has ambitious plans, it has almost no development experience.