IndiGrid Investment Managers Limited announced that it had signed a securities purchase agreement to acquire two solar projects of capacity 50 MW each from Madrid-based developer Fotowatio Renewable Ventures (FRV), FRV Solar Holdings Limited.
The total cost of acquisition has been estimated at ₹6.6 billion (~$89.6 million), subject to adjustment based on the movement in cash, tariff receivables, and outstanding liabilities on the valuation date. IndiGrid will acquire 100% shareholding and managed control in FRV-I and FRV-II, subject to the terms of the securities purchase and other relevant approvals.
FRV-I was incorporated on July 14, 2016, and operates a 50 MW (AC) solar power project in Ananthapuramu solar park. FRV-I entered into a power purchase agreement with the Solar Energy Corporation of India (SECI) on October 05, 2016, for 25 years. The project was commissioned in July 2018. For the financial year (FY) 209-20, FRV-I had total revenue of ₹470 million (~$6.3 million).
Similarly, FRV-II was incorporated on July 09, 2016, and it operates a 50 MW (AC) solar power project in Ananthapuramu solar park. FRV-II entered into a PPA with SECI on October 05, 2016, for a tenure of 25 years. The project was commissioned in January 2019, and for the FY 2019-20, FRV-II had total revenue of ₹500 million (~$6.7 million).
For the FRV Solar Farm-I, the paid-up share capital stood at ₹120 million ($1.6 million), and the convertible debentures were worth ₹820 million (~$11.1 million). For the FRV India Solar Park-II, the paid-up share capital was ₹120 million ($1.6 million), and the compulsory convertible debentures were worth ₹810 million (~$11 million).
As per the BSE filing, Cyril Amarchand and PriceWaterHouse Coopers represented IndiGrid in the transaction. Khaitan and Company and Greenstone Advisors represented the FRV Group in the transaction.
According to the company, the acquisition of the solar assets is in line with IndiGrid’s investment strategy provided in the trust deed, focusing on ensuring stable distribution to unitholders by owning assets with long-term contracts. The completion of the acquisition would depend upon the receipt of relevant approvals and the completion of contractual obligations.
Project acquisitions in the third quarter (Q3) 2020 were a staggering 244% higher at 9.5 GW compared to just 2.8 GW in Q2 2020. Compared to the same quarter last year with 4.4 GW of acquisitions, activity was up 119%, according to Mercom’s 9M and Q3 2020 Solar Funding and M&A Report.
Recently, FRV acquired a 115 MW Metz solar project that is set for construction in New South Wales England region. According to the company’s website, the Metz solar project was planned for development east of Armidale by Infinergy before being acquired by Clenergy, which had the project set for construction in Q4 2020, with all permits secured.
Previously, Mercom reported IndiGrid had raised $29 million (~₹1.86 billion) in non-convertible debentures from the International Finance Corporation to fund 100 MW of solar projects in India. The projects were to be developed in the Ananthapuramu solar park in Andhra Pradesh.
Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.