India’s renewables sector received a total investment of $6.6 billion in the second quarter of the year, surpassing the total investment in 2020
India’s renewable energy sector is in good shape. The second quarter of the year has been a boon for investors, who have earmarked more than the entire amount invested last year, as much as 6.6 billion dollars, compared with the 6.4 billion dollars set aside for Indian renewables in 2020. This uptick in investment in the second quarter, produced by the fall recorded in 2020 due to the COVID-19 pandemic (estimated at 24% according to India’s Institute for Energy Economics and Financial Analysis), lays the foundations for a sector recovery which, according to IEEFA’s own estimates, could consolidate by the end of the year, breaking the investment ceiling of 8.4 billion dollars in 2019.
As the IEEFA explains, most of this money has been channelled through acquisition policy, helping to recycle capital into new renewable energy projects in India. One of the big shifts was caused by Softbank’s exit from the Indian energy sector, which led to the sale of $3.5 billion dollars’ worth of assets to Adani Green Energy Limited (AGEL), making AGEL one of the key players in Indian renewables, as well as the world’s largest solar PV developer.
Other key deals that helped boost investment in renewables in India were the acquisition of Engie by Edelweiss Infrastructure Yield Plus, in a deal worth around $550 million; the acquisition of Acme by Scatec Solar, estimated at around $400 million; and the acquisition of Fortum by Actis for $333 million. In addition to these deals, there were various debt, equity investment, green bonds and mezzanine financing transactions, with green bonds being one of the main attractions for investors, given their average term of 7.25 years and a fixed interest rate of 4.5%.
All these transactions confirm that India’s energy model is continuing to take steps to adapt to the need to electrify its economy.