Banpu, Just Climate, CapitaLand shortlisted to buy Radiance Renewables

New Delhi: Thai energy firm Banpu Public Co. Ltd has joined the fray to acquire Eversource Capital-backed Radiance Renewables Pvt. Ltd, two people aware of the development said, in a deal having an enterprise value of around $325 million.

The Bangkok-headquartered firm has been shortlisted to make a binding offer for the 100% stake sale of Radiance; that puts it in competition with former US vice-president Al Gore headed Generation Investment Management’s Just Climate LLP, and Singapore’s CapitaLand Investment Ltd that have also been shortlisted for the second round, post submission of their non-binding offers (NBOs) in the sale process run by Rothschild & Co.

For second round

“Banpu, Just Climate and CapitaLand have been shortlisted for the second round," said one of the two people cited above requesting anonymity.

Mint earlier reported about Just Climate LLP and CapitaLand Investment Ltd exploring an acquisition of Eversource Capital-backed Radiance Renewables, which operates in the commercial and industrial (C&I) segment.

Radiance, which has an operating capacity of 350 MW C&I projects, is also backed by India’s quasi-sovereign wealth fund National Investment and Infrastructure Fund (NIIF) and the UK government’s Foreign, Commonwealth and Development Office (FCDO). The British International Investment Plc is owned by the FCDO.

Spokespersons for Rothschild & Co. and Just Climate declined comment.

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A CapitaLand Investment Ltd spokesperson in an emailed response said, “We regret we do not comment on market rumours or speculation."

A spokesperson for British International Investment Plc in an emailed response said, “As a matter of company policy, we do not comment on market speculation."

Radiance Renewables executive director and chief executive officer Manikkan Sangameswaran in an emailed response said, "No comments from me on this."

Queries emailed to the spokespersons for Eversource Capital, Banpu Public Company, and NIIF on Monday evening remained unanswered till press time.

C&I interest rises

This proposed deal comes in the backdrop of strong investor interest in India’s C&I segment, with a number of deals in the works, as reported by Mint. The regulatory landscape is supportive of the space with rules allowing large power users to source energy from the open market rather than the costlier grid. C&I projects are also shielded from risks such as power procurement curtailment by state-run power distribution firms. Also, State Electricity Regulatory Commissions (SERCs) implementation of Time of Day (ToD) tariff for large C&I category consumers has helped sustain the investor’s interest.

Analysts believe that C&I and rooftop will be supported by the government’s push.

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“Significant growth is anticipated in the C&I and rooftop solar segments, which together account for approximately 30% of the current solar capacity. Approximately 4 GW/year each are expected to get added in the next couple of years. The growth in the C&I segment will be propelled by companies forming group captive arrangements to benefit from tariff waivers, allowing them to secure power that is reliable, cost-effective (compared to the C&I rates of most state DISCOMs), and environmentally friendly (as they receive renewable energy credits, unlike grid-sourced power)," SBI Capital Markets Ltd said in an August report.

India has an installed renewable energy capacity of 180.79 GW, including 73.31 GW solar and 44.73 GW of wind power capacity.

“Additionally, the PM Surya Ghar Muft Bijlee Yojana (PM-SGMBY) supports this growth by promising up to 300 units of power per month per household," the report added.

The $12.34 billion Banpu Public Co. is present in energy resources, generation, and technology business in Thailand, Indonesia, Vietnam, Lao PDR, Mongolia, China, Japan, Australia, and the US.

Set to double funds

CapitaLand Investment earlier this month announced its target to more than double its funds under management (FUM) in India by 2028, up from S$7.4 billion. CapitaLand Investment group chief executive officer Lee Chee Koon met Prime Minister Narendra Modi earlier this month as part of a group of Singaporean CEOs during Modi’s visit. CapitaLand Investment has S$134 billion of assets under management, and S$100 billion of funds under management. Earlier, it was looking at buying a controlling stake in rooftop solar power producer CleanMax Enviro Energy Solutions Pvt. Ltd, that was last year acquired by Brookfield Renewable for $360 million.

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“CLI will explore opportunities to enter adjacent business segments such as renewable energy and real estate private credit. Renewable energy is a fast-growing segment in India with the government targeting to achieve 500 gigawatts (GW) by 2030 from the current 111 GW. CLI has a captive demand for renewable energy from its tenants across its data centres and business parks," CapitaLand said in a 4 September statement.

London-headquartered Generation Investment Management LLP is one of the world’s largest sustainable investment firms and has $44 billion of assets under management and supervision. NIIF is sponsored and anchored by the Government of India, which holds 49% interest in it. It primarily focuses on investing in core infrastructure sectors such as transport, energy and digital. It manages over $5 billion of equity capital commitments across its three funds—Master Fund, Fund of Funds and Strategic Opportunities Fund.