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Infrastructure & PPPs in India - Q2 2023 Update - Power & Energy Transition

YOG INFRA Q2 2023 insights

INDIA has attracted a lot of interest and investments on its clean energy transition journey - across the value chain of renewabele energy projects i.e. with initiatives for solar module manufacturing as well as government committment to offtake a minimum quantum of renewable energy generation. The overall ecosystem in the country is very vibrant; and a deep understanding of complex policy & regulatory framework is important for developers to implement projects.

Read more about key developments in Infrastructure and PPPs in India in power & clean energy transition sector our latest insight.

This is first publication on a 2-part insight series on India.

 

April 2023

AVAADA TIES-UP USD 1.07 BN FUND FOR GREEN HYDROGEN, AMMONIA VENTURES

Integrated energy platform Avaada Group has tied-up USD 1.07 Bn capital from Brookfield Renewable and the Global Power Synergy Public Company (GPSC) to fund its green hydrogen and green ammonia ventures in India. Brookfield Renewable, through its Brookfield Global Transition Fund (BGTF), will be investing up to USD 1 Bn in Avaada Ventures. The Global Power Synergy Public Company (GPSC) will further invest USD 68 Mn in Avaada Energy for releasing debt obligations and supporting the growth.


AMP ENERGY WINS 1 GW SOLAR CELL AND MODULE CAPACITY

Renewables platform Amp Energy India has won 1 GW capacity for integrating cell and module manufacturing under the country's production-linked incentive (PLI) scheme. Solar Energy Corporation of India, a company of the Ministry of New and Renewable Energy (MNRE), declared the winners -eligible to receive a total of INR 139.4 Bn (USD 1.7 Bn) - in the second tranche of the PLI programme aimed at manufacturing 39.6 GW of solar modules. Amp Energy India's subsidiary, AMPIN Solar One, will receive a maximum incentive of INR 1.4 Bn (USD 16.92 Mn)


INDIA’S RENEWABLE ENERGY MINISTRY ANNOUNCES TIMELINE FOR PROJECT PROCUREMENT

The Indian government has released a timeline for tenders to be floated by relevant implementing agencies for renewable energy projects. Tenders for an annual renewable energy capacity of 50 GW, with at least 10 GW of wind power, are to be issued every year from FY 24 to FY 28. For the financial year ending 31 March 2024, tenders for at least 15 GW capacity each will be floated in the 1st and 2nd quarters and for a minimum of 10 GW capacity each in the remaining two quarters. The call for bids could involve solar, wind, hybrid, round-the-clock renewable energy power, with or without storage.

India has set a target to achieve 50% of electric power installed capacity from non-fossil fuel energy resources by 2030 and reduce the proportion of emissions intensity of the gross domestic product by 45%, compared to the 2005 levels. The Ministry of New and Renewable Energy (MNRE), which issued the notice, is also working towards achieving 500 GW of installed capacity from non-fossil sources by 2030.


INDIA’S BALCO SETS UP SPV TO SOURCE RENEWABLE ENERGY

India’s Bharat Aluminium Company (BALCO) has entered into an agreement with Serentica Renewables India Private (SRIPL) to set up a special purpose vehicle (SPV) to source power. The Vedanta-owned aluminum maker will hold a 26% stake in the planned SPV with an investment of up to INR 1.35 Bn (USD 16.4 Mn). It will source 105 MW of hybrid renewable power for its operations in the Indian state of Chhattisgarh.

The captive business model project, to be developed on a build-own-operate basis, will be financed on a 70:30 debt-to-equity basis. The power delivery agreement will be valid for 25 years from the date of project commissioning. The SPV is expected to begin operations within 2 years.


INDIAN BIOGAS ASSOCIATION MAKES A CASE FOR BIOGAS PLANTS IN PPP MODE AT LANDFILL SITES IN DELHI

Indian Biogas Association (IBA) has urged the Delhi government to set up biogas plants under the public-private-partnership (PPP) model at landfill sites in the national capital to deal with the problem of mounting solid waste in an environment-friendly manner. The government can invite interested entrepreneurs to set up biogas plants at landfill sites.

The IBA opined that biogas can help solve the landfill problem in Delhi by reducing the amount of waste that ends up in landfills and producing a clean and renewable source of energy. Further, it can help in making savings of INR 750 crore (USD 90.6 Mn) by cost-effectively using the resources and through the generation of biogas and organic fertilizer.


May 2023

INDIA PLANS TO ESTABLISH GREEN HYDROGEN BUNKERING AND REFUELLING FACILITIES AT MAJOR PORTS BY 2035

India plans to establish green hydrogen bunkering and refueling facilities at major ports to reduce its carbon footprint by 2035. As one of the world's largest greenhouse gas emitters, the country aims to achieve net-zero emissions by 2070. Initially, 3 ports, namely Paradip in the east, Kandla in the west, and Tuticorin in the south, will have bunker facilities for green hydrogen and ammonia, and the goal is to cover all 12 major ports with green hydrogen bunkering facilities by 2035.

The government is considering financing options for converting these ports into green ports. India has over 200 ports along its 7,500 km (4,660 miles) coastline. Authorities plan to power at least 50% of the vehicle and equipment needs of major ports with electricity by 2030, replacing diesel, and increasing this figure to 90% by 2047.


INDIA WAIVES TRANSMISSION CHARGES ON OFFSHORE WIND, GREEN HYDROGEN AND GREEN AMMONIA

The Indian government has waived inter-state transmission system (ISTS) charges on offshore wind, green hydrogen and ammonia projects for 25 years. The waiver will apply to projects commissioned until 31 December 2032. The decision is expected to facilitate wider execution of offshore wind energy initiatives, promote the expansion of green hydrogen and green ammonia projects, and encourage the offtake of renewable energy from energy storage system projects. The off-shore wind projects commissioned from 1st January, 2033 would be given graded ISTS charges.

The government has also granted complete waiver of ISTS charges for a period of 25 years from the date of commissioning of the project, for Pumped Storage System or Battery Storage Systems or any hybrid combination of these technologies. The projects commissioned on or before 31st December, 2030 shall be eligible for this waiver.


INDIA'S ACME, IGL PLAN GREEN HYDROGEN INFRASTRUCTURE

Indian renewable energy developer ACME Group and natural gas distribution company Indraprastha Gas (IGL) are teaming up to explore potential green hydrogen business opportunities. The companies plan to explore the opportunity of setting up hydrogen generation plants including electrolyzers to blend green hydrogen in IGL’s existing pipeline networks supplying gas to households, industrial and commercial set ups and compressed natural gas for vehicles. Further, both partners plan to identify areas/projects for green hydrogen adoption in the country.

The companies also intend to co-operate on policy matters and help the industry and the government to bring in enabling regulatory framework that facilitates and incentivizes customers to provide long-term offtake commitments for green hydrogen and green ammonia.


NITI AAYOG SUGGESTS BLENDED FINANCING FOR NUCLEAR ENERGY

The Niti Aayog, in its report titled “The-Role-of-Small-Modular-Reactors-in-the-Energy-Transition”, has recommended the use of blended financing and green bonds to attract private investment in nuclear energy. The report suggests a review of regulatory frameworks with an aim to accommodate differing technologies for small modular reactors (SMR) at various stages of research and development.

The concept of SMRs is expected to be important for nuclear energy to remain a competitive option among various power sources. The report mentions the need to integrate regulatory and licensing processes, waste management, explore low-cost finance and bring in public and private capital to accelerate the development and deployment of SMRs. SMRs can also be installed in remote off-grid locations, thus playing a role in achieving energy transition goals.


MACQUARIE'S VIBRANT ENERGY SIGNS INDIA PPA WITH SAINT-GOBAIN

Indian renewables developer Vibrant Energy, a portfolio company of Macquarie Asset Management, has agreed a long-term power supply deal with construction material company Saint-Gobain India. Vibrant will set up an Interstate Transmission System (ISTS) connected wind-solar hybrid power project in India's Madhya Pradesh state with a capacity of 75 MWac/100 MWdc. The duration of the power purchase agreement (PPA) is 20 years.

The project, currently in early development, is expected to start supplying round-the-clock power to various Saint-Gobain plants in the country by the Q4 of 2024. Vibrant is also in discussions with lenders to debt finance the project. The company aims to reach a portfolio of about 5 GW in the medium term.


US DFC COMMITS LOAN TO INDIAN SMART METERING COMPANY

Indian smart meter company Genus Power Infrastructures has received a letter of commitment for a USD 49.5 Mn loan from the US International Development Finance Corporation (DFC). BSE-listed Genus, also the biggest manufacturer of smart meters in India, will use the money to deploy electric smart meters across the country.

The commitment from the DFC is an initial one and there will be more tranches later. Gurugram, India-headquartered Impact Infracap and Sydney-based Beyond Advisory were joint advisors to Genus on the fundraise.

Genus is looking to grow its smart metering business in India for supply, installation and maintenance. The company started looking for investors for a new platform and was exploring various alternatives. It is now in advanced talks with Singapore sovereign investor GIC for the latter to invest in a smart meter concession platform.

India has witnessed a push from federal and state-owned governments to adopt smart meters - connected through a web-based monitoring system - to reduce losses that are said to be about USD 10 Bn each year due to the aggregate technical and commercial losses. The country has so far installed more than 5.5 Mn smart meters and is targeting to install 250 Mn meters by 2025 - with an investment of USD 30 Bn.


June 2023

NTPC TO DEVELOP RENEWABLES IN INDIAN STATE

The green energy unit of India’s NTPC has signed an agreement with the power utility of the state of Uttar Pradesh to collaborate for renewables projects. NTPC Green Energy and Uttar Pradesh Rajya Vidyut Utpadan Nigam will jointly set up floating and ground-mounted solar projects in Ayodhya city in the Rihand reservoir, as well as in other areas, where land is available, all meant to provide a clean source of power for the city. They will also set up a joint venture to look to comply with government orders requiring power producers to generate 40% of their total output through renewables, as well as allowing them to bundle clean electricity with thermal.


G-20 PANEL SUGGESTS CLEANTECH PPP PROJECTS

The G20’s sustainable development financing working group has suggested multiple projects to encourage public-private partnerships (PPPs) as well as other initiatives. It has recommended financial instruments and policies to facilitate private capital in low carbon and green technologies. The group is planning to introduce several financing models.


INDIA’S TORRENT POWER PLANNING 3 BN PUMPED STORAGE HYDRO PROJECTS

Torrent Power Limited has signed a Memorandum of Understanding (MoU) with the Government of Maharashtra for development of 3 Pumped Storage Hydro Projects of 5.7 GW capacity in the State of Maharashtra. The projects would entail an investment of about INR 270 Bn (USD 3.3 Bn) and would provide employment to approx. 13,500 people during the construction period.

Torrent intends to execute these projects over a period of 5 years. The projects would be executed at 3 sites identified by Torrent namely Karjat (3 GW) in Raigarh District, Maval, (1.2 GW) and Junnar (1.5 GW) in Pune District. All the sites are off-stream, and the projects are planned to provide a minimum of 6 hours of energy storage on a daily basis.


NLC INDIA PLANS INR 24,000 CRORE SOLAR INVESTMENT BY 2030

NLC India, post establishment of its green energy arm called NLC India Renewables Ltd, is exploring the option of setting up a step-down subsidiary for which the public sector major would look at bringing private investments or getting it listed. The company would invest more than INR 24,000 crore (USD 2.9 Bn) in its solar power projects till 2030 to diversify operations. So far, the company has an installed solar capacity of 1.42 gigawatts (GW) with a capex of INR 6,000 crore (USD 73 Mn). The company is targeting a 6 GW + solar capacity.

 

Projects Announced – Renewable Energy – Q2 2023 India


Projects Awarded – Renewable Energy – Q2 2023 India


Source: YOG INFRA analysis, Publicly available information

 

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Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development. ​YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle. With our offices in Singapore, India and UAE we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.

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