ENGIE, a global independent power producer (IPP), has acquired a 90 percent stake in Simpa Energy, from its parent company Simpa Networks, a distributed energy solutions provider with pay-as-you-go pricing model to households and businesses.
Through the ENGIE Rassembleurs d’Énergies investment fund, the group supports community initiatives in India. The aim is to help local population have sustainable access to clean energy. ENGIE has invested in the social enterprise Simpa Networks, which provides individual photovoltaic panels for the poorest homes in the Delhi region. ENGIE Rassembleurs de Energies was an early investor in Simpa but the current transaction is with the main commercial business.
Per a Press Trust of India (PTI) report, ENGIE is investing to fund geographic expansion and accelerate growth. The move reinforces ENGIE’s commitment to decentralized renewable energy solutions globally and supports India’s rapid transition to clean power.
Simpa sells solar power systems on financing to households and shops in rural India. Customers make a small initial payment to have the solar PV system installed, then it’s simply pay-as-you-go for the electricity. Simpa mimics the compelling pricing model of pre-paid mobile phones. But there’s an important twist: These small payments for energy service also add up towards the total purchase price and, once fully paid, the customer owns the system, enjoying clean, reliable, electricity for free.
This acquisition fits perfectly into our strategy to be close to the customer in distributed energy and to be present in the ‘Access to Energy space. Simpa has an innovative business model with sound products in a huge untapped market so offering real growth potential.
In India Engie currently has some 800 MW of utility scale solar projects (around 330 MW under construction) and 280 MW of utility scale wind (all committed in final development or construction). Engie can trace its presence in India back more than 20 years and we are open to other inorganic opportunities where they make sound business sense.
“This acquisition fits perfectly into our strategy to be close to the customer in distributed energy and to be present in the ‘Access to Energy space. Simpa has an innovative business model with sound products in a huge untapped market so offering real growth potential,” Malcolm Wrigley, the country manager of Engie India said.
In India, Engie currently has some 800 MW of utility scale solar projects (around 330 MW under construction) and 280 MW of utility scale wind (all committed in final development or construction).
The acquisition of Simpa also resonates ENGIE’s commitment to provide clean energy to people in economically weak and under developed areas. In April 2018, ENGIE completed 100 percent acquisition of Fenix International, a next generation energy company that offers solar home systems (SHS) in Africa.
ENGIE has been gradually increasing its investments in India’s renewable energy sector. In September 2018, ENGIE and STOA, a French infrastructure and investment firm, announced a joint-venture (JV) to build a wind platform in India. The platform, with 50-50 partnership, has set a goal of establishing over 2 GW of wind energy capacity in the next five years.
According to a report by the Global Off-Grid Lighting Association (GOGLA), India has emerged as the world’s largest cash market for off-grid solar products, with 1.3 million products sold in H1 2018 alone. This accounts for an impressive 44 percent of global sales. Over 3.7 million off-grid solar products were sold globally during the first half (H1) of 2018, an increase of four percent in comparison to the same time last year.
Image credit: Simpa Networks
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.