Dubai-based emerging markets buyout fund Abraaj Group has joined hands with ENGIE, a multinational utility company and global independent power producer to set up a wind energy platform in India.
“Together, Abraaj and ENGIE have identified a robust pipeline of wind power projects representing over 1 GW in several key states,” the companies said in a joint statement. “By leveraging Abraaj’s clean energy sector expertise and ENGIE’s operational experience, the partnership will address a large and growing demand for clean energy from the Indian Government as well as businesses in the country.”
The Indian renewable energy sector continues to grow rapidly, underpinned by an increasing demand for power. Power consumption in the country is expected to grow at 9% year-on-year until 2020. The Indian government’s target of 60 GW of wind power capacity by 2022 will require a near doubling of the current installed capacity of 32 GW over the next five years.
Several government initiatives such as the Uday scheme that has helped deleverage the balance sheets of distribution companies; the Green Corridor Initiative that aims at improving interstate connectivity; and the recently announced National Investment and Infrastructure Fund that will provide long-term patient capital for infrastructure investments, together create a compelling investment opportunity for the private sector to help meet the significant demand for energy and more specifically renewable energy in the country.
“The Indian renewables sector has seen strong growth in recent times and we expect demand for power across the country will continue to increase. In line with our commitment to addressing the Sustainable Development Goals, our partnership with ENGIE marks Abraaj’s second investment in the clean energy sector in India,” said Saad Zaman, Partner at The Abraaj Group.
In 2015, Abraaj Group tied up with Aditya Birla Group to create a large-scale renewable energy platform that will focus on developing utility-scale solar power plants in India. Aditya Birla group invested in the platform through Aditya Birla Nuvo (ABNL) and Abraaj through one of its affiliates to build a 1GW energy platform.
“Buoyed by a strong regulatory framework, the renewables sector is a significant long-term, sustainable investment opportunity for Abraaj. Wind power generation today is approaching grid parity and offers a competitive solution to lower average power pool prices. There is a real opportunity to enhance renewable energy generation in India and we are delighted to be working with ENGIE to deliver affordable and clean power to the country.”
“Energy demand is growing tremendously in India, and ENGIE is investing in green energy sources as part of supporting the country with its sustainable development plans. Indeed, the Platform is fully in line with our commitment: provide clean and renewable energy for all,” said Sébastien Arbola, CEO of ENGIE Middle East, South & Central Asia and Turkey.
The Abraaj Group has comprehensive investment experience in the energy sector and has invested over $ 1 billion across growth markets and the ENGIE Group is one of the largest independent electricity producer in the world with 112.7 GW of installed capacity, of which 20% comes from renewables.
