PremiumNEW DELHI: US investment firm Augment Infrastructure will acquire majority stakes of Warburg Pincus LLC and International Finance Corp. (IFC) in rooftop solar power producer CleanMax Enviro Energy Solutions Pvt. Ltd. for Rs1,650 crore. The deal value includes new investments in Mumbai-based CleanMax.
"This would involve a purchase of the stake held by Yellow Bell Investment Ltd (an affiliate of Warburg Pincus, a leading global private equity firm focused on growth investing) and International Finance Corporation (IFC) in CleanMax along with an investment of primary capital in the Company to fund its growth pipeline. UK Climate Investments (UKCI) will continue as an investor and Board member," the firms said in a joint statement on Thursday.
Rothschild & Co was the sale adviser. Mint had reported on 25 October about Warburg Pincus exploring the stake sale. Singaporean conglomerate Keppel Corp. was among suitors for Warburg Pincus LLC’s majority stake.
The transaction is an reaffirmation of growing consolidation in the commercial and industrial (C&I) segment and comes amid a growing focus on environmental, social and governance (ESG) investing. Considering the regulatory risks over green energy contracts and their enforcement in several states, investors are increasingly looking at the C&I space as it is generally insulated from risks such as power procurement curtailment and tariff-shopping by state-run distribution companies (discoms).
A raft of such C&I deals are in play. For instance, promoters of Cleantech Solar Energy plan to sell their controlling stake in the green energy firm backed by Royal Dutch Shell, as reported by Mint. Also, Norway’s state-owned Norfund and TPG Capital’s The Rise Fund have announced their $100 million and $25 million investment, respectively, in Hyderabad-based Fourth Partner Energy recently. Private equity firm Actis Llp plans to invest $850 million in India to build two green energy platforms, one of which will cater to the C&I segment.
“This is Augment Infrastructure’s first investment in an Indian C&I renewable energy company," said Darius Lilaoonwala, managing partner, Augment Infrastructure in the statement.
In July 2017, CleanMax said it has secured equity financing of as much as $100 million from Warburg Pincus. The other investor in the firm is UKCI, a joint venture between Green Investment Group and the UK government’s department for business, energy and industrial strategy. UKCI is managed by Macquarie Infrastructure and Real Assets.
“We are happy to note that both global investors will secure an exit, which is always a responsibility of the management team to deliver upon. I am also delighted to note that over 150 CleanMax colleagues, present and past, are securing a part exit on their ESOPs," Kuldeep Jain, founder and managing director of CleanMax said in the statement.
CleanMax’s operating capacity has jumped from 24MW in 2015-16 to around 750 MW now. CleanMax’s portfolio includes 380MW of large-scale solar farms in Karnataka and Tamil Nadu that supply electricity to corporate customers and 220MW of solar rooftop projects. It has also expanded its portfolio in West Asia, with a 30MW portfolio in the United Arab Emirates and is exploring further expansion in South-East Asia. It also got its first project in Thailand.
“While the primary capital raised by CleanMax will support our strategic expansion efforts to continue building our customer base and add around 400 MW of new capacity annually. We are excited with our aim to enhance our operating capacity from 760 MW to around 2000 MW in the next 3 years," Nikunj Ghodawat, chief financial officer of CleanMax said in the statement.
Deals galore in India’s clean energy space. Attracted by India’s green economy, Canadian pension fund Ontario Municipal Employees’ Retirement System (OMERS) announced its plan to purchase 19.4% stake in NYSE-listed Azure Power Global Ltd. for $219 million from IFC and IFC GIF Investment Company. Recently Thailand’s state owned energy major PTT Group also announced its acquisition of 41.6% stake in Avaada Energy Pvt Ltd for around $454 million.
India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, including 100GW of solar power by 2022. Of the solar capacity, 40 GW is expected to come from rooftop solar projects.
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