Original Post : Utpal Bhaskar,
Livemint
India has
pushed green power to the top of its energy security agenda and needs as much
as $200 billion to meet its target of installing 100GW of solar power and
60,000MW of wind power by 2022. Photo: Bloomberg
New Delhi: West Asian investors are looking at acquiring green power
assets in India for the first time, lured by the government’s push for
renewable energy.
Doha-based Nebras Power QSC and
Dubai’s private equity firm Abraaj Group are
evaluating renewable energy projects, with Abraaj Group evaluating at least two
operating green energy platforms for investing in India.
This development comes in the backdrop of
India’s growing focus on the Gulf region in the era of depressed oil prices.
“West Asian investors are looking at the Indian
green energy space for the first time,” said a person aware of the development,
requesting anonymity.
Abraaj Group has $9 billion under management
with a focus on private equity investing in growth markets.
Qatar
Electricity and Water Co. has a 60% stake in Nebras Power, with Qatar Holding
LLC and Qatar Petroleum
International Ltd holding 20% each in the company, which
invests “in international greenfield and brownfield development or through
acquisition”.
Nebras Power recently signed an agreement with
Qatar Development Fund to invest in energy projects in other countries.
West Asian companies are seeking opportunities
in India at a time when crude oil prices have fallen, impacting the investments
made in conventional energy projects. This is expected to worsen with the
likely lifting of trade restrictions on Iran and indications of a slowdown in
the Chinese economy.
Crude oil prices in the Indian energy basket
averaged at $56.30 per barrel in July, as against $84.16, $105.52, $107.97 and
$111.89 in 2014-15, 2013-14, 2012-13 and 2011-12, respectively.
While an external spokesperson for Abraaj Group
declined to comment, Nebras Power couldn’t be immediately reached for comments.
Of the 189.43 million tonnes per annum (mtpa) of
crude oil sourced by India last year, 109.76 mt came from West Asia.
The National Democratic Alliance government has
been trying to tap West Asian countries for investing in Indian infrastructure
projects without much success.
The initial focus was to attract investments
from Saudi Arabia, Qatar, the UAE and Kuwait. The plan didn’t succeed.
Investments from the UAE so far have amounted to
$10 billion. According to government data, India-UAE trade, valued at $180 million
per annum in the 1970s, is currently at around $60 billion, making the UAE
India’s third largest trading partner in 2014-15 after China and the US. The
UAE was the second largest export destination for India ($33 billion for
2014-15). For the UAE, India was the largest trading partner for the year 2013
(over $36 billion in non-oil trade).
The government has pushed renewable energy to
the top of its energy security agenda and is looking to provide green power at
less than Rs.4.50 a unit. India needs
as much as $200 billion to meet its target of installing 100 gigawatts (GW) of
solar power and 60,000 megawatts (MW) of wind power by 2022.
“Ind-Ra (India Ratings) expects a strong pick-up
in solar power installations over the next four-five years, driven both by the
government impetus of 100GW of solar power by FY22 (60GW through grid-connected
solar projects) and a decline in solar power generation costs,” India Ratings
and Research, the domestic arm of Fitch Ratings, said in a 22 July report.
There has been growing interest from overseas
investors in the Indian renewable energy space.
Russia’s OAO Rosneft,
the world’s largest publicly traded oil company, among others are exploring investments
in India’s solar energy sector.
In June, SoftBank Corp.,
along with Bharti Enterprises
Ltdand Taiwan’s Foxconn
Technology, proposed to invest at least $20 billion in solar energy
projects in India through a joint venture, SBG Cleantech
Ltd. US-based First Solar Inc.and
China’s Trina Solar are
among those considering plans to set up manufacturing facilities in India.
US-based SunEdison Inc. had
also said it plans to establish a joint venture with Adani
Enterprises Ltd to build a solar photovoltaic manufacturing
facility with an investment of $4 billion.
