Leading renewable energy firms in India seek buyers for 20 Gw assets

Nearly 10 leading renewable energy (RE) companies in India are actively seeking buyers for 20 gigawatt (Gw) of their operational and under-construction capacity. This comes in the face of significant hurdles, including a scarcity of power-purchase agreements (PPAs), power supply agreements (PSAs), and issues related to transmission connectivity.

India currently has 150 Gw of installed RE capacity. The ongoing sale accounts for 13.3 per cent of the industry’s total capacity.

According to a banker, Canadian fund Brookfield has found a Malaysian buyer for 1.6 Gw of its operating assets in India and is in the final stages of negotiations, with an enterprise valuation of $1 billion. Brookfield declined to comment.
 

ReNew is also looking to sell part of its solar manufacturing stake to a strategic investor and use the proceeds to reduce debt, said a banker. A ReNew spokesperson, in an emailed response, said: “ReNew doesn’t comment on market speculation.”
 

The JSW group, known for its aggressive acquisition strategy, is in the final stages of talks to acquire Ayana Renewable Power, which is backed by NIIF and British International Investment.

Ayana manages a 5 Gw portfolio of operational and under-construction projects. An email sent to a JSW spokesperson went unanswered.
 

Bankers warn that the increasing number of unsold assets is raising concerns and pushing down valuations. As tariffs continue to decline, older assets may struggle to compete with newer projects.
 

Renewable power developers typically sign PPAs with procurers, who in turn enter PSAs with power distribution companies (discoms). Major procurers include state-owned entities like the Solar Energy Corporation of India (SECI), NTPC, and SJVN.
 

Industry officials said the assets currently in the market either have higher tariffs or are under construction, with some facing regulatory challenges.
 

“Most of the projects which are in the market now are not tied up (sale of power from projects) and it is a challenge now for independent power producers (IPPs). Connectivity to the ISTS (Inter-State Transmission System) or the national grid is scarce in RE-rich areas of Gujarat and Rajasthan, where most of these projects are situated,” said an executive with a leading RE player, which in the past had signed several marquee acquisitions.
 

“The outlook on transmission and sale of power from RE projects is bleak in the short term so prudent investors do not want to buy more projects,” it said.

In 2019, the Ministry of Power had announced a waiver for solar and wind projects on ISTS (Inter-State Transmission System) charges, which are levied when a project is connected to the national grid to supply electricity anywhere in India. These charges range from Rs 1 to Rs 2.5 per unit. Since 2019, RE tariffs have fallen below Rs 2, partly due to the waiver.

The Centre has every year extended the waiver with the latest till June 2025. It has now expanded to include other renewable sources, such as pumped hydro, battery storage, green hydrogen, offshore wind, etc.

Several upcoming projects in western India are facing a crunch of substations to connect to the national grid. This also delays their waiver compensation, factoring which they had decided the tariff of the said project, said an industry executive.

The Centre is now taking a relook on the ISTS waiver. With a dual purpose of enhancing power transmission infrastructure at the states’ level and boosting RE connectivity across all regions, the ministry of power is planning to push states to connect upcoming RE projects to the state’s grid and not the national grid.

The industry, however, feels this solves only one part of the problem and buyers for renewable power are still missing. “Discoms are reluctant to sign long-term agreements for purchasing RE power. Around 30-40 Gw of projects awarded through the bidding route by the central agencies are yet to find PPAs,” said an executive requesting anonymity.