French energy utility firm ENGIE SA is going to sell 74 per cent of its solar business in India to EIYP, an infrastructure-focused fund managed by Edelweiss Alternative Asset Advisors and part of diversified Indian financial services conglomerate Edelweiss Group.
ENGIE is one of the major foreign investors contributing to Indian solar space that uses all its engineering capabilities to design, finance and build renewable energy production capacity.
It is aiming to dilute majority of its stake in the local businesses in the backdrop of the Andhra Pradesh’s government’s decision to revise its renewable energy contracts.
“In line with both ENGIE’s and EIYP’s strategies, ENGIE has agreed to sell (once the transaction has closed in accordance with its terms) a 74 per cent stake in 12 solar assets aggregating 813 MWp of operating capacity collectively to EIYP and Sekura Energy, a portfolio company of EIYP,” the utility firm said in a statement.
According to statement, the completion of this transaction (subject to the usual conditions associated with this type of operation) is expected to occur during the first half of 2020 and will allow ENGIE to reduce its net debt by more than EUR 400 million.
This transaction marks the beginning of an ambitious strategic partnership between ENGIE and EIYP, aiming to expand a growing solar platform. ENGIE will maintain its leading industrial role by remaining in charge of the development, construction and operation of present and future solar plants.
Paulo Almirante, ENGIE Executive Vice-President and Chief Operating Officer said, “This transaction allows us to accelerate the implementation of our strategic model in renewables, and to free up capital to keep up investing in the very dynamic Indian solar market.
Head of EIYP, Subahoo Chordia, said this strategic partnership “brings the complementary capabilities of the fund and ENGIE together while sharing similar high governance standards and values.”
(With input from agencies)