India’s EESL to Seek Investor for $5.3 Billion Solar Venture
(Bloomberg) -- India’s Energy Efficiency Services Ltd. is seeking a partner to expand its distributed solar power venture, Managing Director Saurabh Kumar said.
EESL has chosen Investec Capital Services to advise on the deal and expects it to come up with a valuation for the project in three months, Kumar said. The project has 100 megawatts of operational solar generation units in the western state of Maharashtra and purchase contracts for building another 700 megawatts. The ultimate aim is to increase it to 5,000 megawatts of solar capacity combined with battery storage, which will require an investment of 400 billion rupees ($5.3 billion), Kumar said.
The Economic Times reported late Thursday EESL was in talks with Royal Dutch Shell Plc for selling a stake in the venture. Kumar declined to comment on talks with Shell and so did a spokesperson for the Anglo-Dutch company.
“Talks with potential investors haven’t started yet,” Kumar said. “We don’t even know the valuation of the venture. Once we have that, we start approaching investors.”
Terms of the deal, including the share of ownership to be sold, will be decided when the talks start, he said.
The venture will seek to set up solar plants on unused land belonging to state distribution utilities and the power will be sold to farmers, Kumar said. The delivered price of electricity will be about 3 rupees per kilowatt hour, which can go up to 5 rupees/kWh with storage, he said.
EESL is championing India’s energy efficiency efforts with installation of power-saving lighting, and the replacement of energy-guzzling appliances, such as air conditioners and irrigation pumps with newer, less-power consuming equipment. The company is a joint venture between four state-run power companies -- NTPC Ltd., Power Grid Corp., Power Finance Corp. and REC Ltd.
©2020 Bloomberg L.P.