Oslo-based renewable energy firm Scatec has agreed to buy a 50% stake in a power plant of India’s Acme Solar in the state of Rajasthan, marking its entry into the South Asian nation.
The plant has a capacity of 900 MW, Scatec said Thursday. It didn’t disclose the deal value.
However, the project has an estimated total capital expenditure of $400 million, with 75% debt financing from an Indian state-owned lender. This means the equity component is around $100 million. Scatec may be paying a premium as against its share of $50 million for coming into the project already awarded to Acme.
The plant has a 25-year power purchase agreement with Solar Energy Corporation of India (SECI) secured in a tender in 2018. The annual production from the plant is expected to be 1,600 GWh.
“The country is targeting a significant growth in renewable energy capacity by 2030 and is a key growth market for renewables. We have already established presence on the ground and are positioning for future tenders within solar, wind and hybrids,” said Raymond Carlsen, CEO of Scatec.
Scatec is targeting 15 GW capacity globally by the end of 2025 and expects India to be a key market in the future. It already has more than 3.5 GW in operation and under construction across a dozen emerging economies in Africa, Asia, Latin America and Europe. This will be Scatec’s first project in India.
Scatec, which was set up in 2007, struck a big-ticket deal last year when it acquired Norwegian hydropower developer SN Power from Norfund, the Norwegian investment fund for developing countries, for $1.17 billion. Last month, Scatec teamed up with International Finance Corporation to set up a solar power platform for Africa.
Acme will be the engineering, procurement and construction provider for the project. Scatec will ensure optimisation of engineering, procurement and operations of the plants. Construction is likely to start soon with scheduled completion in 2022.
ACME was founded in 2003 by Manoj Kumar Upadhyay. It started by providing equipment for telecom infrastructure. In December 2011, the company started its first solar power project. The firm has grown organically, unlike peers ReNew Power and Azure Power that have made acquisitions for expansion. It has in the past toyed with a plan to go public.
It has a portfolio of about 5 GW, out of which 2.3 GW is operating and 2.7 GW is under construction. The firm aims to have an operating capacity of 25 GW by 2030.
Last year, Acme had sold two solar projects in India totalling 400 MW to British private equity firm Actis. In another transaction in 2020, Malaysian state-run oil giant Petronas acquired two solar power plants from Acme with a total capacity of 100 MW.