Indian multinational pharmaceutical company Cipla Limited entered into a share subscription and shareholder’s agreement along with a power purchase agreement (PPA) to acquire a 32.49% stake on a fully diluted basis in AMP Energy Green Eleven Private Limited.

Amp Energy will commission a 10 MWac (16 MWdc) captive open access solar project in Osmanabad to supply power to Cipla under a long-term PPA of 25 years.

The project will be an addition to Cipla’s efforts to increase the share of renewable power sources in its operation.

This will be Amp’s second project with Cipla in Maharashtra, the first being a 30 MW project commissioned in December 2020.

Cipla will acquire 750,000 equity shares of face value ₹10 (~$0.13) each at par for a total of ₹75 million (~$1 million). Cipla will also subscribe to 67,500 compulsorily convertible debentures of ₹1,000 (~$13.40) each.

Post-acquisition, AMP Energy Green Eleven Private Limited will become an associate of Cipla.

Subscription to equity shares and compulsorily convertible debentures shall be completed within two months from the date of signing the transaction documents.

AMP Energy Green Eleven Private Limited, a wholly-owned subsidiary of AMP Energy, is a special purpose vehicle formed to set up a captive solar power project in Maharashtra.

In January 2021, Cipla had announced that it would procure solar power from a 20 MWac group captive project in Tuljapur, Maharashtra. This project will supply power to Cipla’s manufacturing units at Kurkumbh and Patalganga in Maharashtra. In May 2019, Cipla had acquired a 26% stake in AMP Solar Power System, a wholly-owned subsidiary of AMP Solar Technology, and a special purpose vehicle formed to set up the captive solar project.

India installed 307 MW of open access solar capacity in the third quarter of the calendar year 2021, registering a 47% increase compared to 209 MW installed in Q2 2021, according to Mercom’s India Solar Open Access Market Report Q3 2021.

One of the driving factors for the expansion of open access is that the commercial and industrial (C&I) consider it a viable alternative source for procuring power. In Maharashtra, the multi-year tariff has been one of the reasons for the growth of the open access market. It gives the consumers a long-term perspective of energy and fixed charges. Maharashtra is also home to a large number of industrial consumers who pay a high cost for procuring power from DISCOMs, making open access a more viable choice.

Note: The installation number is updated to reflect the AC and DC capacity.