Suntech can’t stop the Bleeding as top managers exit despite restructuring and UBS
October 14, 2012Why are Global Food Costs Shooting through the Roof – Food Security Map
October 15, 2012The Indian Wind Energy Industry is seeing rapid change with the rise of a number of independent power producers (IPPs) focused on Wind Power Development. These companies have been fueled by private equity and investment banking funding which has been attracted by India’s strong energy demand. While the traditional wind farm investors have retreated with the cancellation of the accelerated depreciation subsidy, strong wind energy focused developers have expanded sharply. These wind energy companies have strong operational expertise and backed by cheap long term funds helping them make profits while the weaker players get weeded out.
Reasons for Private Equity Investment in Indian Wind Industry
The Indian Wind Energy Industry is currently under a lot of stress as subsidies and incentives have been withdrawn towards the sector. This has led some of the wind industry companies to sharply reduce their projections of demand in 2012 to fall by around 66% from the previous year. However the Private Equity Industry continues to remain bullish about the prospects of renewable energy in India as around 30 GW of green power is planned to be added over the next 5 years. The TINA factor is set to boost the growth of renewable energy in India as coal, gas and hydro power face constraints of cost, availability and delays. A 14-15% ROI on wind energy investments and a huge power deficit is attracting global investment banking majors who continue to invest big time into new green power companies in India. Morgan Stanley, JP Morgan and Goldman Sachs have already invested millions of dollars in wind power and other renewable energy generating companies and more PE investments are in the pipeline as well.
Wind Energy Developers in India – aggressive expansion
Not only Wind Developers but Wind Turbine Companies have also been putting up factories in India to catch a slice of the world’s fifth largest wind energy market. Even Chinese companies like Dongfang and Shanghai Electric have managed to win contracts from power companies like KSK Energy. Greenko one of the first Green Utilities in India is raising funds to put even more wind turbines in India while Caparo has the biggest expansion plans in place. CLP which is the largest wind energy capacity owner in India too is plowing ahead with plans to add to the wind capacity. The most surprising entry is by Malaysian casino developer Genting, which has raised debt from HSBC to put up a 92 MW Wind Farm in India. Techno-Electric is another company which is looking to invest in wind farms in India. CEIL raised £52 million in October 2010 by listing on London’s Alternative Investment Market (AIM). Caparo intends to acquire and develop a portfolio of wind farms with a target total annual installed capacity of up to 5,000 MW, which it intends to develop in two concurrent phases: Phase I consisting of 3,000 MW with a target completion date of 2016; and Phase II consisting of 2,000 MW with a target completion date of 2017.
Hyderabad-based Wind energy company Mytrah Energy Limited today said it expects to make a profit before tax (PBT) of $ 10-12 million on a projected revenue of $ 28-30 million in the first half of the current financial year , its first operational period, in contrast to a perception that clean energy forays take longer gestation to break even.
Founded in October, 2010, the London Stock Exchange listed company has a 316 mw operational capacity. located in seven sites, which it takes to 600 mw by investing Rs 2,000 crore in the next couple of years. The company expects to achieve a 16% return on equity over a period of 25 years of plant life where the wind farm output is typically based on a 25-26% plant load factor(PLF).