Mumbai:
Canadian Solar
, one of the biggest solar power companies in the world, made its first investment in India’s alternative energy sector by acquiring
49%
stake each in
two projects
of
Suzlon Energy in
Telangana for an aggregate amount of Rs 26.4 crore. The Nasdaq-listed company, with a market capitalisation of $880 million, has the option to buy the rest of the 51% stake in each of Suzlon’s 15-megawatt projects one year after they turn commercially operational.
Suzlon on Wednesday also sold a 49% stake in another 15-megawatt project in Telangana to Shanghai-based
Unisun
Energy for Rs 13.5 crore. Unisun, too, has the option to buy the remaining 51% stake in the project, Vayudoot Solarfarms, in future.
The two solar power units that Canadian Solar acquired in Telangana are expected to be commissioned next fiscal and debt financing will cover 80% of the costs. Canadian Solar, according to the deal inked with Suzlon Energy, will arrange the financing for these projects. Canadian Solar has routed its investment in these projects — Avighna Solarfarms and Amun Solarfarms — through its Singapore arm. The transaction will boost Canadian Solar’s global project pipeline, which currently stands at 2.4 gigawatts, said the company’s vice-president (operations) Steve Iyer.
The two projects have power purchase agreements with Telangana government at a fixed rate of Rs 5.54 per kilowatt hour for 25 years. The state’s power distribution outfits — Telangana Southern Power Distribution and Telangana Northern Power Distribution — will buy the electricity from the two units.
Earlier this year, Suzlon Energy had won 210 megawatts of solar projects in Telangana through competitive bidding and signed power-purchase agreements in February. The part-sale of the two 15-megawatt projects is in line with the Tulsi Tanti-led company’s strategy to hold lesser number of assets. Suzlon Energy, in which billionaire entrepreneur Dilip Shanghvi has a large minority stake, now prefers to build and sell solar assets rather than own and operate them.
In June, Suzlon had sold a 100-megawatt solar project, also in Telangana, to Hong Kong-listed CLP Holdings for Rs 73.5 crore.
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Reeba Zachariah is assistant corporate editor at The Times of Ind...
Read MoreReeba Zachariah is assistant corporate editor at The Times of India, Mumbai. She has been covering large Indian business houses such as the Tata Group. She also reports on a host of sectors like hospitality, retail, travel, liquor and consumer durables. She has been writing on mergers and acquisitions and private equity.
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