YOG INFRA

Oct 20, 20228 min read

Infrastructure & PPPs in India - Q3 2022 Update - Power & Energy Transition

YOG INFRA Q3 2022 insights

INDIA's clean energy and decarbonization journey is marked by rapid developments in various renewable energy technologies, including larger renewable energy generating assets; increased focus on hybrids; and strong partnerships to develop green hydrogen projects. Besides a favorable policy & regulatory framework, we see this transition bring also reflected in business plan & future strategy of large Indian developers in the country.

Read more about key developments in Infrastructure and PPPs in India in power & clean energy transition sector our latest insight.

This is second publication on a 2-part insight series on India.

July 2022

INDIA’S ONGC AND GREENKO FORGE HYDROGEN TIE-UP

Indian state-run explorer Oil and Natural Gas Corporation (ONGC) has signed a partnership agreement with compatriot renewables developer Greenko. The companies will jointly pursue opportunities in the renewables, green hydrogen, and green ammonia sectors.

The agreement is in line with India’s strategy of producing 5 Mn tonnes of green hydrogen annually by 2030.

INDIAN SOLAR PARTS MAKER PLANS IPO FOR GREENFIELD EXPANSION

Indian solar cell and module maker Jupiter International is firming up plans for an initial public offering (IPO) to finance a 2 GW greenfield facility. Jupiter, which is looking to appoint investment banks for the IPO, plans to raise up to INR 6 Bn (USD 75 Mn), about half of the estimated INR 12 Bn cost of the manufacturing plant, the remaining cost will be financed through debt and internal accruals.

The greenfield project will be developed in two equal phases starting operations by the end of 2023 and 2024. The IPO will open a route for Jupiter to draw capital from the public market in the future, too, as the company plans to expand its production capacity over the next two to three years and diversify into wafer manufacturing for backward integration.

Jupiter is negotiating the land, regulatory and environmental approvals with two states in India, and expects the location for the manufacturing facility to be finalised this year.

INDIAN PUBLIC POWER ENTERPRISES PARTNER FOR HYDRO

India’s NHPC and Damodar Valley Corporation have signed a memorandum of understanding to explore the feasibility of jointly developing hydropower and pump storage projects. The state-run companies said they are planning to study energy storage solutions in line with a national objective of energy transition to 500 GW of renewables by 2030 and net zero by 2070.

INDIA TO SCRAP E-REVERSE AUCTIONS FOR RENEWABLES

The Indian government has in-principle agreed to stop electronic reverse auctions for wind power projects. The mechanism will also be discontinued for other clean power projects. Electronic reverse auctions were introduced to promote competition and discover the lowest potential price, allowing developers to see each other’s bids in real time. This allowed them to revise their quotes, resulting in aggressive proposals, with tariffs falling to record lows. This left little room for managing risks.

The Solar Power Developers Association has been pushing for the move for the past four years and the government has finally seen the merit of the suggestion.

India is targeting 450 GW of renewables capacity by 2050, compared with a little more than 100 GW at the end of 2021. The target was revised upward last year from 175 GW set for 2022.

INDIAN DEVELOPER WINS 300 MW WIND POWER PROJECT

India’s Torrent Power has won the right to build a 300 MW wind power project in Karnataka state. The project, which will cost an estimated INR 26 Bn (USD 325 Mn), was awarded by the Solar Energy Corporation of India (SECI).

The asset will sell electricity to the SECI at a tariff of INR 2.94 per kWh, covered by a 25-year power purchase agreement (PPA). The project is expected to be completed within two years from signing the PPA. Torrent owns an operational capacity of more than 1 GW of renewables, including wind and solar. It is developing more than 800 MW of renewables, including the latest project.

TATA POWER WINS 600 MW RENEWABLES PROJECT

India’s Tata Power will develop a 600 MW hybrid wind and solar energy project for the state of Karnataka. The project was awarded by state-run Solar Energy Corporation of India to TP Saurya, a wholly owned subsidiary of Tata Power, following tariff-based competitive bidding and an e-reverse auction. It will be commissioned within two years of the execution of a power purchase agreement.

The total renewable energy capacity of Tata Power, an arm of the diversified conglomerate Tata Group, is now 5.5 GW. This includes 3.6 GW of installed capacity and 1.9 GW being implemented.

August 2022

AVAADA SEEKS USD 3.75 Bn DEBT FOR INDIAN AMMONIA PROJECT

Thailand's PTT-backed Indian renewables developer Avaada Group is talking to lenders to arrange debt finance for a USD 5 Bn green ammonia project in the state of Rajasthan. Avaada is seeking to borrow up to 75 % of the project cost - USD 3.75 Bn - with the remainder covered by equity finance from the company, adding that the company is in advanced discussions with both international and domestic banks for the debt.

The green ammonia facility to be built in the Kota district of Rajasthan will have a production capacity of 1 Mn tons per annum (MTPA). Avaada plans to start construction in December 2023 and expects the first phase (0.6 MTPA) to start commercial operations in December 2026.

Avaada signed a memorandum of understanding (MoU) with the state government of Rajasthan to set up the green ammonia facility and a renewable energy plant in the state's Kota district. The MoU was part of the investment promotion strategy in Rajasthan and is expected to provide direct jobs to about 3,500 people.

INDIA’S L&T DRAWS UP USD 2.5 Bn GREEN ENERGY BLUEPRINT

India’s Larsen and Toubro (L&T) is looking to invest up to USD 2.5 Bn over the next four years to build its green energy portfolio. The engineering company commissioned its first hydrogen plant at the Hazira manufacturing facility in the state of Gujarat. The asset will produce 45 kg of green hydrogen daily for captive consumption.

L & T has been studying prospects in the renewables sector, including battery storage and offshore wind. It plans to begin manufacturing key technological instruments, including electrolysers, advanced cell batteries and fuel cells.

The company is carving out a part of its hydrocarbon team to identify business opportunities in offshore wind farms in India and globally. It plans to supply products such as wind farm foundations and other modules but not manufacture wind turbines. The company’s green portfolio is worth INR 388.4 Bn (USD 4.8 Bn).

INDIA'S RENEW BORROWS USD 1 Bn FOR 1.3 GW HYBRID PROJECT

Indian clean energy developer ReNew Power has raised about USD 1 Bn in debt finance for a 1.3 GW renewable hybrid battery-backed power project in the country. The financing was arranged from a group of 12 international lenders, led by Rabobank.

The interest rate, after hedging, is expected to be lower than ReNew's current average debt cost on its balance sheet. The USD 1.35 Bn project - which will be able to supply power day and night - will build wind and solar power facilities across the Indian states of Karnataka, Rajasthan and Maharashtra.

The facilities include three wind farms with total capacity of 900 MW and one solar plus battery storage farm with a capacity of 400 MW/100 MWh. The projects will provide 400 MW of power supply through a 25-year offtake agreement with the state-run Solar Energy Corporation of India (SECI).

It will sell power at INR 2.9 (USD 0.027) per kWh in the beginning, increasing the tariff by 3 % annually for 15 years before levelling out for the remaining 10 years of the offtake agreement.

September 2022

INDIAN DEVELOPER SIGNS USD 28 Mn WIND ENERGY DEAL

KP Energy will develop a wind energy project worth INR 2.2 Bn (USD 28 Mn) for conglomerate Aditya Birla Group. The project is based in the Bhavnagar district of the state of Gujarat. Commissioning is scheduled for March 2023. The parties have executed definitive contracts and will sign additional contracts detailing phase-wise development. KP Energy will provide turnkey solutions.

ADANI TO INVEST USD 70 Bn IN GREEN HYDROGEN

India’s Adani Group will invest USD 70 Bn in an integrated green hydrogen-based value chain over the next decade as part of its energy transition goals. The group will add 45 GW of hybrid renewables generation capacity to its existing 20 GW portfolio.

The company is constructing a 10 GW silicon-based solar project that will be backward-integrated from raw silicon to solar panels, a 10 GW integrated wind turbine manufacturing facility and a 5 GW hydrogen electrolyser factory.

Adani Group will also build green data centres that will be connected through a series of terrestrial and globally linked undersea cables.

The investments are part of a USD 100 Bn spend in the next decade across its various business including digital infrastructure, transportation, and energy.

KKR TO INVEST IN HERO GROUP'S INDIAN RENEWABLES BUSINESS

Private equity investor Kohlberg Kravis Roberts (KKR) and Indian two-wheeler company Hero Group have agreed to jointly invest USD 450 Mn in the latter's renewable energy business, Hero Future Energies. This investment will help Hero Future to expand its renewables capacity and capabilities in solar, wind, battery storage and green hydrogen, as well as set up a presence in new markets.

Set up in 2012, Hero Future Energies is an independent power producer with a diversified portfolio of 1.6 GW of operating solar and wind projects. Outside India, the company has a presence in Bangladesh, Vietnam, Singapore, Ukraine, and the UK.

INDIA’S SERENTICA RENEWABLES TO INSTALL 1.5 GW HYBRID CAPACITY

India’s Serentica Renewables has launched a green energy platform in India and plans to install 1.5 GW of hybrid wind and solar capacity. The Gurugram, Haryana-headquartered company is owned by Twinstar Overseas, which also has controlling stakes in Vedanta Group’s Sterlite Power Transmission and Sterlite Technologies.

Serentica will install the projects across the states of Karnataka, Rajasthan, and Maharashtra, where it has already acquired connection approvals. A large part of the capacity will be used to deliver close to 600 MW of clean energy to Vedanta Group entities. The capacity will be commissioned in 24 months, subject to statutory approvals.

Serentica plans to participate in government tenders for projects that have synergies with its focus on providing green energy solutions to commercial and industrial customers.

INDIA'S AMP ENERGY SIGNS 400 MW GREEN HYDROGEN PARTNERSHIP

Renewables developer Amp Energy India has partnered with US-based Ohmium International for 400 MW of green hydrogen capacity in India. The two will deploy Ohmium's proton exchange membrane electrolysers that produce pressurised, high-purity hydrogen, formid-sized commercial and industrial projects of 25 MW or smaller, over the next three years.

Amp Energy India has a portfolio of about 2 GW spread across 15 states, with more than 60 customers in sectors including information technology, pharmaceuticals, automobiles, cement, steel, and heavy engineering.

INDIAN RENEWABLES DEVELOPER SECURES FINANCING FOR HYBRID PROJECT

Indian renewables developer KPI Green Energy has secured financing from the State Bank of India for a 16.10 MW hybrid power project at Bhavnagar in Gujarat state. The asset will produce 16.10 MW from wind and 10 MW from solar. The company has also secured long-term power purchase agreements with various offtakers.

Gujarat-based KPI Green Energy, a part of the KP Group, has commissioned 165 MW and aims to have a 1 GW portfolio by 2025.

Projects Announced – Renewable Energy – Q3 2022 India

Projects Awarded – Renewable Energy – Q3 2022 India

Source: YOG INFRA analysis, Public available information

ABOUT YOG INFRA

Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development. YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle. With our offices in Singapore and India, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.