Emerging markets-focused investment firm Abraaj Group has teamed up with French utility Engie to launch a wind platform in India.
The joint venture has identified a pipeline of wind power projects of over 1GW in several key states across the country. It said the pipeline is supported by favourable government policies and in line with the pair’s commitment to clean energy.
Several government initiatives – including the Uday scheme, which helps de-leverage the balance sheets of electricity distribution companies, and the Green Corridor Initiative, the national grid connectivity scheme – are supporting the development of renewable energy in India. The National Investment and Infrastructure Fund, the country’s quasi-sovereign infrastructure fund, is also setting up a green vehicle to introduce long-term private capital to boost the sector.
“Our partnership with Engie marks Abraaj’s second investment in the clean energy sector in India. Buoyed by a strong regulatory framework, the renewables sector is a significant long-term, sustainable investment opportunity for Abraaj,” said Saad Zaman, a partner at Abraaj, adding that wind power generation is approaching grid parity and offers a competitive solution to lower average power pool prices today.
Abraaj said power consumption in the country is expected to grow at 9 percent year-on-year until 2020. Driven by the increasing demand for power, the renewable industry has grown rapidly. The Indian government is just halfway to achieving its target of having 60GW of wind power capacity by 2022, with current installed capacity of 32GW.
The Dubai-based investor partnered with Aditya Birla to build a 1GW of solar in India in 2015, followed by a 2017 investment for a majority stake in Jhimpir Power, a 50MW wind project in Pakistan. It manages $11 billion under its investment strategies and has invested over $1 billion across growth markets.
Engie, for its part, claims to be the world’s largest independent electricity producer with 112.7GW of installed capacity. About 20 percent of its portfolio is renewable energy generation. It said it is also the largest wind power producer in France and Belgium, with 4.5GW of wind installed across the world.