Infrastructure & PPPs in India - Q3 2023 Update - Power & Energy Transition
YOG INFRA Q3 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. We see increasing number of partnersships betwwen large Indian and International developers to develop new proejcts in the country. 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.
ADANI TOTAL GAS PLANS 5 COMPRESSED BIOGAS PLANTS
Adani Total Gas, a joint venture between India’s Adani Group and French energy giant Total Energies, plans to set up 5 compressed biogas (CBG) plants in the next 5 years. A plant with a daily capacity of 600 tonnes is under construction in Uttar Pradesh and is expected to begin production by the end of 2023 and this is the first of the projects. The total investment in the plant is around INR 7.5 Bn (USD 90 Mn).
Each of the other 4 plants will have a daily feedstock processing capacity of 200 tonnes to 250 tonnes and produce between 10 tonnes and 20 tonnes of CBG every day. The company is looking at locations across India and will cover both agricultural residue and municipal solid waste. CBG plants are a natural strategic investment towards supplementing ATGL’s city gas distribution and providing clean energy. This aligns with India’s commitment to the environment and the country’s COP26 commitments.
GMR ARM AWARDED USD 929 Mn INDIA SMART METERING PROJECT
GMR Smart Electricity Distribution has secured an INR 75.93 Bn (USD 929 Mn) contract to implement a large-scale smart metering project as part of a reform plan initiated by the Indian government power ministry. The unit of Indian diversified infrastructure group GMR will install 7.6 Mn prepaid smart meters across 2 electricity distribution utilities, Dakshinanchal Vidyut Vitran Nigam and Purvanchal Vidyut Vitaran Nigam.
The scope of the project encompasses the design, supply, installation, commissioning, operation, and maintenance of prepaid smart meters infrastructure covering consumer premises, as well as at the network level, including distribution transformers and feeders for 10 years. GMR Smart Electricity Distribution is a subsidiary of GMR Power and Urban Infra.
INDIA CONSIDERS CARBON TRADING MARKETS FOR RENEWABLES
The Indian government is looking to establish markets for clean mobility, bio-fuels, green hydrogen and renewables with an aim to start carbon trading. NITI Aayog, the country's public policy think tank, is preparing a framework for this purpose. Revenue generated via the sale of carbon credits can be used to finance sustainable energy projects. Trading can begin on a voluntary basis initially.
RENEW, GENTARI FORM CLEAN ENERGY VENTURE FOR INDIA
ReNew Energy Global Plc, India’s leading decarbonization solutions company, through its subsidiary ReNew Power Pvt. Ltd., and clean energy solutions provider Gentari, through its subsidiary Gentari Renewables India Pte. Ltd., have executed key terms to collaborate on a 50:50 joint venture in clean energy solutions.
As part of this proposed joint venture, Gentari and ReNew will collaborate to explore investments into the development of renewable assets including solar, wind and energy storage, to achieve a target of 5 GW in renewable energy capacity. The collaboration between the parties follows Gentari’s initial investment for a 49% equity stake in ReNew’s 403 MW Peak Power project in May 2023.
L&T TO INVEST USD 4 Bn TO DEVELOP GREEN HYDROGEN PROJECTS
India’s Larsen & Toubro (L&T) is planning to invest up to USD 12 Bn of which approximately USD 4 Bn will be used to renewables capacity. The investment will be made in the next 5 years. The engineering and construction giant will develop a green hydrogen and ammonia production capacity totaling 2 to 3 Mn tonnes and has been in talks with some state governments for acquiring land.
L&T Energy Green Tech will implement a diversified business strategy for renewables and could eventually expand into grid batteries, fuel cells and hydrogen vending. L&T will also evaluate options to monetize the arm.
INDIA’S FOURTH PARTNER TO CONSTRUCT 25 MW SOLAR PLANT
Indian renewables platform Fourth Partner Energy Private (Fourth Partner) has signed an agreement with the Asian Development Bank (ADB) for a long-term loan of up to INR 1.2 Bn (USD 14.7 Mn). The financing will be used to construct and operate a 25 MW solar photovoltaic power plant in Tirunelveli in the Indian state of Tamil Nadu. The facility, expected to generate about 50.7 GWh of electricity annually, will directly sell power to commercial and industrial users.
BROOKFIELD PLANS 4 GW INDIA RENEWABLES PARK VENTURE
Brookfield Asset Management is planning to set up a platform for renewable energy parks in India with a potential generation capacity of about 4 GW. The Canadian investor is in discussions with a potential partner in India.
The asset manager may develop renewable projects on his own or even sell the land parcels to other generators to develop the projects. The Indian government aims to cut projected carbon emissions by 1 Bn tons by 2030, while the aim is to achieve net zero by 2070. The authorities have approved the building of 59 solar parks with a total capacity of 40 GW. Locations for the parks that Brookfield will construct include the states of Rajasthan and Gujarat. In many areas in India, it is relatively easier to get regulatory approval as well as transmission connections for projects located in a renewables park.
INDIAN STATE SEEKS PROPOSALS FOR SOLAR PPP ALONG EXPRESSWAY
The state government of Uttar Pradesh in India plans to develop solar parks along the Bundelkhand Expressway. The project will be implemented in the public-private partnership mode, and the government is inviting expressions of interest. Solar panels will be installed on the land along both sides of the 296 km expressway.
INDIA AND SAUDI ARABIA TO COOPERATE FOR ENERGY INVESTMENTS
India and Saudi Arabia have signed a memorandum of understanding specifying the areas for cooperation in the energy sector. The segments include renewables, energy efficiency, hydrogen, and grid interconnections. The countries will also encourage bilateral investments in renewables including hydrogen, power storage, oil and gas, as well as carbon capture, utilization and storage. India and Saudi Arabia will accelerate the rollout of a USD 50 Bn West Coast refinery project.
According to the MoU, India and Saudi Arabia will cooperate in the following areas:
Renewable Energy, Energy Efficiency, Hydrogen, Electricity and Grid Interconnection between the two countries, Petroleum, Natural Gas, Strategic Petroleum Reserves and Energy Security.
Encouraging bilateral investment in the field of Renewable Energy, Electricity, Hydrogen and Storage; and Oil & Gas.
Circular Economy and its technologies to reduce the effects of climate change, such as: carbon capture, utilization and storage.
Promoting digital transformation, innovation and cyber-security and artificial intelligence in the field of Energy.
Strengthening cooperation with companies specialized in the field of energy.
Working on developing qualitative partnerships between the two countries to localize materials, products and services related to all sectors of energy, supply chains and its technologies.
Any other fields related to the energy field that the two countries agree upon.
INDIA AND UK PARTNER FOR INFRA FINANCE
India and the UK have launched an infrastructure finance partnership to support India's National Infrastructure Pipeline. The India-UK Infrastructure Finance Bridge - led by the City of London and India’s top state planning agency NITI Aayog - will aim to secure long-term investment in what it considers vital infrastructure in India.
The initiative was launched on the sidelines of a bilateral economic and financial dialogue. The National Infrastructure Pipeline is a collection of infrastructure projects worth about INR 102 Trn (USD 1.2 Trn) and was announced in 2019.
INDIAN STATE PLANNING 500 MW SOLAR PPP REPORT
The state government of Karnataka in India is looking to develop a 500 MW solar park in Bidar district. State-run Karnataka Renewable Energy Development (KREDL) has sought financial proposals from consultancies to draw up project and feasibility reports. Asset commissioning is scheduled for December 2025.
The Ministry of New and Renewable Energy, which has approved the proposal in principle, will provide either INR 2 Mn (USD 24,136.65) per MW or 30% of the total cost, whichever is lower, to develop infrastructure inside the park. The total costs have yet to be determined. The proposed site will be spread over 2,000 acres and KREDL is seeking expressions of interest from landowners for lease. Separately, the state government is also planning to add 3 GW capacity to its existing 2 GW Pavagada Solar Park.
Projects Announced – Renewable Energy – Q3 2023 India
Projects Awarded – Renewable Energy – Q3 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.