One of the leading solar power developers globally, SkyPower, is looking to sell equity stake in solar power projects in India. The Canada-based company is the latest in a long line of foreign developers looking to offload stake in Indian projects. Fortum and SunEdison are some major companies that have either sold or are looking to sell off equity stakes.
India’s Yes Bank has been assigned the task of looking for potential buyers of SkyPower’s solar projects. The developer was awarded 350 megawatts of solar power projects across two states following competitive auctions. As reported last month, projects in one of these states have run into regulatory trouble.
Apart from the two competitive auctions in Madhya Pradesh and Telangana SkyPower has not been lucky in picking up any utility-scale solar power projects in India. This could partly be due to the sharp increase in competition among foreign as well as Indian project developers.
At a 2015 renewable energy investment event organized by the Ministry of New & Renewable Energy, SkyPower Global committed to set up 9.9 gigawatts of solar power capacity in India over the next few years. The company also signed an agreement with BYD to jointly submit a bid for storage-equipped solar power projects in India. It is unclear at the moment if the company would hold true to its commitment of exit the Indian market completely.
SkyPower is active in emerging solar power markets of Africa and south Asia where governments are yet to transition from feed-in tariffs to competitive auctions; as the former are significantly greater, a developer would naturally prefer to avoid competition.
With the increased competition in the Indian market and the 86% decline in tariffs, it may have led developers to look for additional ways to raise capital. Many, like Adani Green Energy, Acme Solar and ReNew Power Ventures, are looking to launch IPOs while some others, like Suzlon Energy, Green Infra, RattanIndia Solar, and Welpsun, have sold equity stakes (Welspun first sold equity stake to GE Energy Financial Services in one of the plants before selling all its renewable energy assets to Tata Power Renewable Energy).
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