JSW Energy, Torrent, Sembcorp join race for Vector Green assets

Leading domestic energy producers - JSW Energy, Torrent Power and Apraava Energy (formerly CLP India) and European major Sembcorp - have joined the race for acquiring 700 megawatts (MW) of wind and solar energy assets under Vector Green Energy, said multiple people aware of the development. The assets will be valued at ₹4,500-5,000 crore ($700 million), added sources.
Vector Green Energy is wholly owned by funds managed by Global Infrastructure Partners India, the Indian affiliate of Global Infrastructure Partners (GIP) - a leading global independent infrastructure fund manager. Standard Chartered Bank is advising GIP to sell-off the assets.

Vector Green portfolio includes 19 ground-mounted utility scale projects located across 8 states as well as 89 rooftop solar projects on 216 roofs across 7 states in India. An additional 90 MW of solar projects are under implementation in Gujarat. Vector Green had expanded its portfolio in 2019 by acquiring about 225 MW solar generation capacity from RattanIndia.

ET first reported about the potential transaction in October 2021.

Spokespersons with GIP, JSW Energy, Apraava Energy declined to comment while mails sent to Sembcorp, Torrent Power did not elicit any responses till the press time.

GIP is one of the world's largest infrastructure focused investors that manages over $71 billion (Rs 5.3 lakh crore) of assets including over 15GW of renewable projects. GIP entered India in 2018 by acquiring infrastructure asset management business from IDFC Alternatives Ltd. The most significant attribute of the Vector Green portfolio is that 97% of the capacity is contracted with the best off-takers of the country viz. SECI and NTPC, through 25-year fixed- tariff power purchase agreements, said in a 2021 Crisil report.

Most of the major power producers in India are in a mode of reducing carbon emissions with expanding their clean energy portfolio.

JSW had announced large plans to reduce the carbon footprints, with achieving a renewable energy capacity of 10 GW by FY25 and 20 GW by 2030. JSW Energy has allotted a capex of Rs75,000 crore for expanding the renewable energy capacity. At present, the share of clean energy in the installed capacity of 4.6 GW is 30% and it is expected to reach 70% by FY25 and 85% by FY30. At present, 2.5 GW renewable energy production is under construction.

JSW Energy is also acquiring 1.8 GW renewable energy assets of Mytrah Energy for $1.8-2 billion.

Sembcorp had announced last year about expanding its renewable energy capacity to 10GW by 2025 from 2.6GW in 2020, and a 25 percent reduction by 2025 in its greenhouse gas (GHG) emissions from 2020. Sembcorp's renewable energy capacity stands at 5.7GW with wind and solar offerings in key markets such as India, Singapore, Vietnam and China.

Torrent Power currently has an aggregate installed generation capacity of 4.7 GW, with a renewable portfolio of 1.6 GW.

Apraava Energy, jointly owned by Hong Kong based CLP and Canadian fund CDPQ. has a diverse portfolio comprising 3.1 GW of installed capacity which includes 924 MW of wind and 250 MW of solar energy projects across seven states, as well as a power transmission asset.