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Engie in talks with Equis Energy to acquire green energy assets in India

According to reports, French energy company Engie is in talks with Singapore-based renewable energy developer Equis Energy to acquire projects from its India portfolio comprising green energy platforms Energon and Energon Soleq, two people with knowledge of the matter said.

“Engie is looking to acquire selective assets of Equis Energy,” said one of the persons cited above requesting anonymity.

“Given that the sell-off is part of a strategic review of projects across Asia, Equis may prefer someone with a global presence,” the second person added.

While Energon is focused on wind power projects with 414 megawatts (MW) of operating assets, Energon Soleq works in the solar sector and is developing projects totaling 560MW.

With around €66.6 billion in revenue, Engie has been trying to expand its presence in the Indian clean energy space and set up a 2 gigawatt (GW) capacity by 2019. Its subsidiary Solairedirect has been actively bidding for solar power projects and has a 810MW portfolio.

Mint reported on 14 June about Equis Energy’s sell-off plan, as part of the strategic review of its Asian renewable energy portfolio.

Engie’s interest in India stems from the National Democratic Alliance government’s ambitious clean energy target of 175GW by 2022. Of this, 100GW is to be generated by solar projects and 60GW by wind projects.

Equis has raised around $2.7 billion in equity and started Equis Energy in 2012. The firm has 4.7GW of renewable energy generation assets across Asia-Pacific, with an additional 6.3GW under development in Australia, India, Indonesia, Japan, the Philippines, Taiwan and Thailand.

“Equis Energy, Asia’s largest independent renewable energy independent power producer (IPP), has appointed Credit Suisse (Singapore) Limited and JP Morgan (S.E.A.) Limited as financial advisors and global coordinators to conduct a strategic review with respect to its renewable energy portfolio,” Equis Energy said in an 18 April statement.

Solairedirect also participated in the bids for setting up the Bhadla solar park in Rajasthan that saw a record low tariff of Rs2.44 per unit. It also won the rights to set up a 250MW solar plant at Kadapa in Andhra Pradesh, and sell power to state-run NTPC Ltd at Rs3.15 per kilowatt-hour (kWh).

While spokespersons for Credit Suisse, JP Morgan and Equis Energy declined comment, Engie’s country manager for India in an emailed response said, “Engie does not comment on market rumours.”

As part of a strategy to reduce its coal-fuelled capacity, Engie sold its 1,000MW Meenakshi Energy Pvt. Ltd plant at Nellore in Andhra Pradesh to India Power Corp. Ltd, a Srei Group company, in November last year.

The impact of renewables on other conventional sources of energy is already being felt.

“Competition from renewable energy will continue to increase, with technological advancements reducing capital costs. Renewables’ contribution to global primary energy needs is likely to grow at a faster pace at 4% by 2020 from the current estimated 3.0%,” India Ratings and Research wrote in a 13 July report.

Analysts believe that renewable energy will play a prominent role in the India’s energy mix given the government’s support.

“The policy support is evident from the government of India’s revised RE (renewable energy) capacity target of 175GW by FY22 and an upward revision in recommended level of renewable purchase obligation (RPO) notified by the ministry of power in July 2016,” ratings agency Icra wrote in a June report.

“Even under a conservative assumption of overall RPO at 15% (comprising 10% non-solar RPO and 5% solar) by FY22 on an all India basis, the incremental cumulative RE requirement for the period FY18-FY22 is estimated at 65GW, which is quite significant,” the report added.

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