Binding offers for Sprng Energy are to be placed by March 15, in what would be one of the biggest deals in India’s green energy sector.
Seventeen companies had submitted non-binding offers in the first stage of the sale process, managed by Bank of America.
In the second stage, five companies — Shell plc, Adani, the Canada Pension Plan Investment Board (CPPIB), Singapore’s Sembcorp Industries Ltd and ArcelorMittal — carry out due diligence.
According to the people quoted above, who spoke on condition of anonymity, the enterprise value of the deal is estimated at around $2.5 billion.
“Shell and Adani are likely to be the frontrunners for the Sprng Energy transaction. Almost all of the non-binding offers placed in the first stage by everyone were around $1 billion in equity,” the statement said. one of the two people mentioned above.
Mint reported on Dec. 8 that about 20 entities, including BlackRock Inc., Adani, JSW Group, Brookfield Asset Management Inc., KKR, Macquarie Group and four Canadian pension funds – CPPIB, CDPQ, Ontario Municipal Employees Retirement System (OMERS) and Ontario Teachers’ Pension Plan — had signed nondisclosure agreements for the transaction.
Sprng Energy has an operational portfolio of 1.75 gigawatts (GW) and 5 GW in various stages of implementation.
The share purchase agreement is expected to be signed by the end of March.
A Bank of America spokesperson and an external ArcelorMittal spokesperson declined to comment. Emailed questions to spokespersons for Actis, Shell India, CPPIB, Sembcorp Energy India Ltd and Adani Group went unanswered as of press time.
In 2018 Actis sold Ostro Energy Pvt. Ltd to ReNew Power Ventures in 2018 for an enterprise value of $1.5 billion. Last August, ReNew Power Pvt. Ltd has completed its merger with Nasdaq-listed Special Purpose Acquisition Company (SPAC) RMG Acquisition Corp. II (RMG II), assigning an enterprise value of approximately $8 billion and a net worth of $4.4 billion to the new entity, ReNew Energy Global Plc. Additionally, Adani Green Energy Ltd (AGEL) bought Japanese SoftBank Group Corp. and Bharti Enterprises Ltd owned solar power producer SB Energy India for an enterprise value of $3.5 billion.
The sale of Sprng Energy comes against the backdrop of Actis’ plans to invest $850 million in India to build two green energy platforms, as announced by Mint earlier.
The first platform will focus on setting up grid-connected solar and wind farms, while the second will address the growing commercial and industrial (C&I) segment. Actis, which invests only in emerging markets, has so far committed $2.1 billion for India across energy, financial services and real estate.
India’s green economy is attracting growing interest following the government’s targeted actions to tackle climate change, as evidenced by the latest EU budget measures to reduce emissions and carbon intensity.
India has also unveiled its new green hydrogen policy which promises incentives ranging from cheaper renewable energy, to waiving interstate electricity transmission charges for 25 years for projects commissioned before June. 2025 and land in renewable energy parks, among others.
The idea is to take advantage of cheap green energy to make the emission-free fuel of the new era.
India plans to meet half of its energy needs from renewables by 2030 and increase power generation capacity from non-fossil fuels to 500 GW by the end of this decade , as Prime Minister Narendra Modi promised at the CoP-26 summit in Glasgow in November last year. .
He also pledged to reduce India’s carbon emissions by 1 billion tonnes by 2030, reduce the carbon intensity of the economy by less than 45% by the end of the decade and achieve net zero carbon emissions by 2070.
India runs the largest clean energy program in the world.
According to the Central Electricity Authority, by 2030, the country’s energy needs will be 817 GW, more than half of which will be clean energy.
Shell has been exploring clean energy space opportunities in India and was also in talks with state-owned Convergence Energy Services Ltd to invest $500 million in the state-owned company’s decentralized solar business, as Mint reported. earlier.
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