Essel’s Solar Power Plants are Up for SALE

Tata Power Ltd and Actis LLP are in separate talks to buy the solar power business of Subhash Chandra’s Essel Infraprojects Ltd.

The interest from the Indian power producer and the UK-based private equity fund makes it a four-horse race for Essel’s solar power assets which are spread across Uttar Pradesh, Odisha and Karnataka. Greenko Group and Hero Future Energies Pvt. Ltd are already vying for these assets.

Discussions are focused on the final valuation and both Tata Power and Actis have made non-binding offers.

Essel Infraprojects has a presence across renewable energy, transportation, electricity transmission and distribution, and urban infrastructure. It has 685 megawatts (MW) of solar power capacity, of which 165MW is operational. An additional 520MW of solar projects is under construction.

If successful, the transaction would mark Tata Power’s biggest acquisition of solar assets since 2016 when it acquired 1.1 gigawatt (GW) renewable energy portfolio of Welspun Energy Ltd for $1.4 billion.

Tata Power has said that it is aiming to draw up to 40% of its generation capacity from clean energy sources by 2025. It has also set a target to expand the capacity of its renewable energy unit to 20,000 MW during this period.

India’s renewable energy space, especially the solar power segment, has seen significant consolidation in recent years. A number of large assets have changed hands as power tariffs fell to record lows due to intense competition, backed by low financing costs and falling module prices.