Macquarie to buy solar assets from Hindustan Power for $600 million

MUMBAI: An infrastructure fund of Australia’s Macquarie Group Ltd has agreed to buy about 330 megawatts (MW) of operational solar assets from power producer Hindustan Powerprojects Pvt. Ltd for an enterprise value of $600 million, said two people familiar with the discussions.

The deal, which will give Macquarie an entry into India’s renewable energy sector, is in an advanced stage of completion and an agreement has been signed, these people said, asking not to be named as the discussions are private.

Macquarie Asia Infrastructure Fund (MAIF) will hold a 100% stake in these assets, which are spread across 18 special purpose vehicles, largely in the state of Gujarat, these people said. The projects have been operational since 2010 and have thus signed power purchase agreements at tariffs higher than the prevailing solar energy tariffs.

The Macquarie Group declined to comment. A spokesman for Hindustan Powerprojects also declined comment.

Of the $600 million deal value, $250 million is the equity value and about $350 million is the debt associated with the projects, one of the two people cited above said.

Macquarie wants to create a renewable energy portfolio consisting of solar and wind projects in India and is simultaneously on the lookout for other assets, this person said.

The deal comes at a time when merger and acquisition activity in the sector has heightened and several clean power producers are looking for growth capital.

Hindustan Powerprojects, formerly Moser Baer Projects Pvt. Ltd, currently operates about 600MW of solar power capacity under subsidiary Hindustan Cleanenergy and led by its chairman Ratul Puri. The firm also operates a 1,200MW coal-fired plant in Madhya Pradesh, in which a Macquarie and State Bank of India fund have previously invested Rs580 crore. Mint had reported last month that Macquarie and Hindustan Powerprojects were in talks for the sale of about 320MW in solar assets.