SHV Energy Moves To Sell SunSource’s Solar Assets for $100M
New Delhi: In a significant development in the renewable energy sector, Dutch multinational SHV Energy has engaged BNP Paribas to facilitate the sale of solar energy assets from its subsidiary, SunSource Energy. Valued at approximately $100 million, this transaction represents a major strategic shift as SHV Energy focuses on its renewable energy portfolio.
The deal, currently in its initial stages, involves the potential sale of 290 megawatts (MW) of operational assets primarily serving the commercial and industrial segments. Furthermore, it includes a framework that allows the complete acquisition of an additional funded pipeline of 300 MW upon commissioning.
Strategic Moves by SHV Energy
"The transaction involves a mix of secondary sale and primary infusion," disclosed an insider familiar with the proceedings, who chose to remain anonymous. This dual approach indicates SHV Energy’s intent not only to divest existing assets but also to attract further investments.
SHV Energy already has a notable presence in various energy markets, including liquefied petroleum gas (LPG), liquefied natural gas (LNG), and green energy. The company expanded its renewable footprint when it acquired a majority stake in SunSource Energy in May 2021. Established in 2010 by Adarsh Das and Kushagra Nandan, SunSource Energy has become a significant player in India‘s growing renewable energy landscape.
Despite the unfolding transaction, spokespeople from SHV Energy, SunSource Energy, and BNP Paribas did not respond to inquiries sent on October 22.
Green Energy on the Rise in India
The proposed sale comes during a time of heightened investor interest in India’s commercial and industrial energy sector. Recent reports indicate that energy firms such as Thailand’s Banpu Public Co. Ltd and Generation Investment Management’s Just Climate LLP are eyeing potential acquisitions, including Eversource Capital-backed Radiance Renewables Pvt. Ltd, in a larger deal valued at approximately $325 million.
This wave of investment aligns with India’s commitment to renewable energy. The nation is rolling out the largest renewable energy programme in the world, with a staggering investment of Rs 8.5 trillion in renewable resources between 2014 and 2023. With its regulatory framework encouraging large power users to procure energy from the open market instead of the conventional grid—which tends to be more expensive—India is creating a favorable terrain for commercial and industrial projects.
Advantages of the Current Regulatory Landscape
• Reduced Risks: Projects in the commercial and industrial sectors are safeguarded against potential disruptions from state-run power distribution firms regarding power procurement.
• Incentivized Tariffs: The introduction of time-of-day tariffs by state electricity regulatory commissions aids in encouraging investment by providing more predictable energy costs.
India’s Renewable Energy Capacity
India is advancing rapidly on its green energy objectives, boasting a total installed renewable energy capacity of 210 GW, which includes 90.76 GW from solar and 47.36 GW from wind sources. Key states that have taken the lead in deploying green energy projects include:
- Rajasthan: 29.98 GW
- Gujarat: 29.52 GW
- Tamil Nadu: 23.70 GW
- Karnataka: 22.37 GW
The Indian government is also focused on bolstering domestic solar cell and module manufacturing capacities. The current manufacturing capabilities include approximately 10 GW for cells and 60 GW for modules, further indicating the country’s commitment to becoming a solar powerhouse.
Future Prospects and Industry Impact
The unfolding sale of SunSource Energy’s assets could have far-reaching implications for the renewable energy landscape in India. By strategically attracting investments, SHV Energy aims to enhance its position while contributing to India’s green mission.
This market activity showcases an increasing recognition of the significance of renewable resources and the burgeoning investment opportunities in India’s commercial and industrial energy sectors. Investors and stakeholders are keenly observing this transaction, as it might serve as a bellwether for future collaborations and developments in green energy.
As the renewable energy market evolves, it will be interesting to see how other firms respond to the increasing demand and adapt to the changing regulatory environment. The future looks bright for India’s commitment to renewable energy, but engagement and dialogue among stakeholders—including potential buyers and sellers—are crucial to sustaining momentum.
Engage with us in the comments below—how do you think this deal will shape the future of renewable energy in India? Share your thoughts!
