The recent change in government seems to have brought with it a surge in foreign investments in the Indian renewable energy sector. One company that has attracted significant investment from highly reputed foreign investors is Welspun Energy.
Multilateral finance agency Asian Development Bank (ADB) has made equity investment in one of the leading renewable energy companies in India and a subsidiary of Welspun Energy. The bank invested $50 million in Welspun Renewables Energy Limited to pick up 13.3% stake in the company.
WREL is a 100% subsidiary of Welspun Energy. WREL portfolio includes total of 309 MW (289 MW of solar projects and 20 MW of wind projects) operational projects in different states of India. The company has more than 200 MW of projects under construction and 1.2 GW of projects under various stages of development.
ADB’s current investment of $50 million is expected to double the current solar and wind portfolio of WREL with at least 600 MW operational projects by March 2016. The investment made by ADB is part of its plan to infuse $2 billion a year in clean energy in the region to help meet increasing power demand. In 2012, the bank had lent $103 million to a subsidiary of Reliance Power to finance the construction of India’s largest solar thermal power plant.
WREL also managed to raise an additional $35.5 million through sale of debentures to a subsidiary of the German development bank, KfW. Earlier this year, Welspun Energy sold a portion of its equity interest in India’s largest solar PV project that it had commissioned. GE Energy Financial Services paid $24 million for the equity stake in the project that is expected to earn $35 million in annual revenue.
The company has some expansive plans to install renewable energy projects across the country and may even consider floating an initial public offering to raise funds in the near to medium term. The ADB is expected to support the facilitation of such an IPO.
Even before the change in government Indian renewable energy companies had attracted significant investments from foreign investors. ADB had invested $30 million in NSL Renewable while the International Finance Corporation invested $55 million in Simran Wind Energy to support the company’s expansion in the wind energy sector. The $380 million multi-phase funding by a Goldman Sachs-backed fund in ReNew Power Limited remains the largest-ever foreign investment in an Indian renewal energy company.
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