According to reports, Indian solar-power developer Welspun Energy Ltd. has already raised 10% of the funds needed for a $3 billion renewable-energy expansion in India and is in talks with potential financial partners for another $225 million, a top executive said in an interview this week.
Vineet Mittal, Welspun’s co-founder and managing director, said he was confident the company would meet its targets for new capacity in light of renewable-energy policies in India at both the national and state levels. Welspun plans to build one gigawatt of wind power and 750 megawatts of solar power by 2017.
“The banks are getting more and more comfortable” with us, Mittal said.
Mittal said Welspun has already raised more than $300 million and is in talks for an additional $225 million. He said he expects the company to go public sometime in the next three to five years, although there is no specific plan to do so.
Welspun, a division of the conglomerate Welspun Group, is part of a wave of new renewable-energy producers that have sprouted in recent years in India, where the national government and many state governments have set aggressive renewable-energy targets for new capacity. The national government has said it wants 20 gigawatts of solar power by 2022, up from current installed capacity of 979 megawatts, according to figures from risk consultancy Eurasia Group.
Mittal’s trip to the U.S. included visits with suppliers such asFirst SolarInc. (FSLR) and existing and potential financiers, a group that includes multilateral banks and finance institutions, large private U.S. banks and Indian state banks. Mittal said he was restricted from naming specific institutions that have invested in Welspun.
Eurasia Group analyst Will Pearson said it is a “good time” to buy solar-power equipment on the global market, given the glut of supplies. But he noted that the national Indian government had enacted some local-content requirements and that there is talk that national policy makers will favor additional measures to strengthen domestic solar-power manufacturing; such measures could crimp the prospects for companies such as Welspun.
“If a clamp-down occurs, then solar could be in trouble,” Pearson said. “That is a question mark.”
But Mittal said that Indian states haven’t imposed local-content requirements at the state level and that even national policies haven’t blocked Welspun from importing thin-film solar-power modules. Mittal expressed confidence that Indian policy makers would enact favorable policies to solar-power companies such as Welspun, given that some 400 million Indians still have no access to power.
“I do not think in future policy government there would be any local-content requirement,” Mittal said in an email message. “Energy security and grid parity is more important for our country.”