CLP India, the local unit of Hong Kong-listed utility CLP Group, has made its first steps into the country’s solar energy sector by setting up a joint venture with Suzlon Group, India’s largest wind turbine maker.
CLP India holds 49 percent of the JV, which has been established to develop a 100MW solar project at Veltoor in Telangana. The utility has the option to acquire the remaining 51 percent in the future.
The project, which will be 20 percent funded by equity and 80 percent by debt, is expected to be commissioned in May 2017. It has secured a 25-year power purchase agreement with a fixed tariff at INR5.59 ($0.082; €0.074) per kWh from Telangana Southern Power Distribution Company.
The transaction size was not disclosed, but CLP India said in a statement that the JV plans to invest about INR7.6 billion towards the project. The 100MW project is part of a 210MW project pipeline which Suzlon won through a competitive bidding process. The rest includes a 50MW project and four projects of 15MW each.
The deal marks CLP's first investment in India’s solar energy sector. With this investment, CLP India becomes one of the largest renewable energy producers in India, with operational and committed capacity of around 1.1GW across wind and solar. Recently, CLP India also agreed to set up a 132MW solar project at the Jhajjar power station with the State Government of Haryana.
“This investment in India will bring our solar capacity across the group to 245MW, with our portfolio of renewables amounting to over 3GW. It is another step forward in our commitment to increase the share of renewable energy in our portfolio to 20 percent in 2020,” noted Richard Lancaster, chief executive officer of CLP.
“India is a key growth market for CLP,” he said, adding that the Indian government has an ambitious target of installing 175GW of renewable energy by 2022, 100GW of which is solar.
Having invested INR145 billion in India’s power sector, CLP India was also the first power company in the region to issue corporate green bonds, as well as the first power company in India to issue an asset-specific bond to back its wind portfolio last October.