India’s renewable energy industry could see equity investments of some $150 billion by 2030, according to Gaurav Singhal, managing director at Bank of America’s Indian division.
These deals will invariably involve Indian energy players, Singhal said, as quoted by Bloomberg in a report that mentioned SoftBank Group Corp.’s renewables business sale to Adani Green Energy at an enterprise value of $3.5 billion. The deal, Adani said, would help it achieve its renewable energy portfolio target of 25 GW ahead of schedule.
The interesting thing about this deal, according to Bloomberg and BofA’s Singhal, was that Adani Green Energy joined the group of prospective buyers for SoftBank’s 80-percent stake in SB Energy at a late stage. However, it had the advantage of being an Indian company, Singhal noted, and that its own assets were in close proximity to SB Energy assets.
Yet, there is another reason why prospective investors would want to team up with local companies in the push for India’s renewable energy sector.
“Some of the issues of dealing with the federal government can be handled by only the local partners,” Sighal explained, as quoted by Bloomberg. “Foreign investors cannot take that call solo.”
India’s renewable power capacity has grown enormously over the past decade, from less than 20 GW in solar farms to over 96 GW of solar, wind, biomass, and small hydropower. With utility-scale hydropower plants, renewable capacity stands at 142 GW or 37 percent of India’s total power capacity.
At the same time, India accounts for 9 percent of emerging market electricity demand and as much as 20 percent of expected demand growth.
“While fossil fuel demand might again increase in the near-term to meet latent electricity demand, India has demonstrated how a double leapfrog — connecting nearly all households to electricity and its renewable energy rollout — can be driven with policy priorities and market design,” a report by Carbon Tracker and the Council on Energy, Environment and Water said earlier this year.