CLP India buys 49% stake in Suzlon's solar project in Telangana

Hong Kong’s CLP Holding has forayed into India’s solar energy sector with the formation of a joint venture with Suzlon Group for developing a 100 MW solar project at Veltoor in Telangana. As per the agreement, announced yesterday, CLP India has acquired 49 percent stake in SE Solar, a special purpose vehicle (SPV) set-up by Suzlon. CLP India has the option to acquire the balance 51 percent in future. The project is expected to be commissioned by May 2017 and will be funded 80 percent by debt and 20 percent by equity.

India is a primary growth market for CLP and the Veltoor solar project will make an important contribution to CLP's expansion plan. Besides, it will aid CLP to meet its target of having 20 percent of power generated by renewable energy by 2020. Recently, CLP India also signed a MoU with the State Government of Haryana to set up a 132 MW solar project at its Jhajjar power station. 

Suzlon won solar projects of 210 MW in Telangana through a competitive bidding process and the power purchase agreements (PPAs) for the same were signed in February 2016. These include one project of 100 MW, one of 50 MW and four projects of 15 MW each. 

“We have been keen to invest in solar in India to complement our wind portfolio, and have evaluated projects that will be value-enhancing for our shareholders, while being attractive for our customers. The Veltoor solar project meets both the criteria. We believe that the state of Telangana has a favourable solar policy, which creates a conducive environment for us,” said Rajiv Mishra, managing director, CLP India.

Globally, renewable energy is witnessing a paradigm shift from being considered alternate to mainstream source of energy. Investments in both wind and solar have garnered traction owing to the improving cost competiveness enabled through technology advancements and the need to transition from fossil fuel dominated energy architecture. The target of 175 GW renewable energy by 2022 outlined by the government of India, offers an opportunity of over 100 GW solar in the next 6 years.

“I am confident, with the conducive policy environment and public-private partnership we will seize this opportunity to ensure sustainable, affordable and reliable energy for all. We look forward to continuing our long-standing relationship with CLP and contribute towards nation's energy security,” said Tulsi Tanti, chairman and managing director, Suzlon Group.

Since its entry in the Indian power sector in 2002, CLP India has become one of the largest foreign investors in the domestic power sector with a total committed investment of over Rs 14,500 crores. The diversified and environmentally friendly generation portfolio, amounting to over 3,000 MW, covers renewable energy, supercritical coal and gas fired power plants. CLP India is one of the largest renewable energy producers in India with operational and committed capacity of around 1100 MW across wind and solar. All the wind projects are wholly owned by CLP. 

“With the Veltoor solar project, we are now one of the largest renewable energy producers in India with operational and committed capacity of around 1100 MW across wind and solar. We believe that Suzlon can leverage their project execution capabilities to deliver the Veltoor solar project successfully,” commented Mahesh Makhija, director renewables – business development & commercial, CLP India.

Suzlon, one of the leading players in the wind energy sector with approximately 9.50 GW of installation in India, has recently forayed into the solar space. J P Chalasani, Group CEO, Suzlon, added, “Solar complements our existing strengths, infrastructure and experience in wind and we will leverage the same for executing solar projects. Similar to our business model in wind, we will offer end-to-end solutions in Solar by leveraging our existing project execution capabilities pan-India. We are glad to partner with CLP for the Telangana solar project and we see immense synergy in our resolve to enhance India’s renewable energy portfolio.”