The Possibility of Re-investment of $ 450 in India’s Green Energy Space
The UK-based firm, Actis has recently invested in the energy space and a possibility arises of a larger allocation to India. In the past, it had invested $450 mn in the alternative energy space and has indicated it will commit more capital to the world’s second most populous nation, where power consumption is expected to outpace growth in GDP. In addition, with the government trying to make India the world leader in renewable energy, it makes the country one of the best investment themes among the emerging market economies. Actis recently raised $2.7 billion to invest in the energy space and is expected to make the larger allocation to India, its top official said. Growth market-focused alternative investment firm Actis said India is one of its core investment markets where it has committed nearly a billion in the past 12 months, betting big on a fresh wave on renewable energy and continued advancement in fintech and consumer businesses compared to other emerging market peers.
The company in the past 12 months have committed $950 million in India, with an opinion that India is a very promising market in the power sector. The thermal coke and the unavailability of requisite gas to run the power plants, combined with the government’s ambition to be a leader in the renewable space, it’s a fantastic investment opportunity in a space where we are a leader. Also the growth in GDP it believes that the growth in electricity consumption will grow higher scale up the nation making it one of the most attractive markets.
Ostro Energy, the renewable energy platform launched by Actis in 2014, was sold to Sumant Sinha-led Renew Power Ventures for an enterprise value of Rs 10,800 crore ($1.66 billion), the biggest M&A deal in the renewables sector, in April this year. From 50MW capacity, Ostro was grown to a producer of $1.1 GW of renewable energy under Actis. Sprng Energy is another renewable energy platform set up in India by Actis, with a total commitment of $450 million of equity from Actis Energy Fund 4. Actis plans to set up 2GW of renewable energy capacity (solar and wind) through the platform in the next 4-5 years. Actis, which manages more than $1 billion in India, has started investing in the country since 2004-05. The government of India has encouraged renewable energy production and at the federal level, they have support from the PPA, auctions, and NTPC.
In February 2017, Solenergi, a 100 percent Mauritius-based holding company of Sprng Energy Private Limited, participated in the REWA Solar Park (Madhya Pradesh) auction and won a 250MW PPA, which is currently under development. Actis had made one of the largest exits in India by selling Paras Pharmaceuticals Ltd. In 2010, it sold its controlling stake in Paras to Reckitt Benckiser Group Plc. Actis, which had acquired 63 percent of Paras Pharma for $150 million, sold the stake for $726 million. However, some of its bets in consumer and healthcare such as Nillgiri’s and Sterling Hospital did not do well.
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