Warburg Pincus plans to invest $75 million in CleanMax Solar

In one of the largest overseas investments in the Indian rooftop solar space expected to be announced shortly, US-based private equity firm Warburg Pincus Llc plans to invest $75 million in CleanMax Solar, an on-site rooftop solar power developer, said several people aware of the development.

This comes in the backdrop of the government’s ambitious plan to add 100 gigawatts (GW) of solar power generation capacity by 2022. Of the overall solar power target, 40 GW is to come from rooftop solar projects.

A raft of overseas investors has shown interest in leveraging India’s growing green economy in the off-grid generation space. These include Japanese financial services firm ORIX Corp, which plans to set up a joint venture firm with SUN Renewables for setting up distributed generation solar power projects.

“Warburg Pincus is in talks with CleanMax Solar for a substantive investment,” said a person requesting anonymity.

Another person who also did not wish to be identified confirmed the development.

Warburg Pincus has invested around $460 million across six assets in the infra and energy sectors. Mint reported on June 16 about its plans to buy a 43% stake in Tata Technologies Ltd for $360 million. Some of its portfolio companies include Lemon Tree Hotels Ltd, Capital First, AU Financers (India) Ltd, Diligent Power Pvt Ltd, among others.

“Warburg has been looking at rooftop solar distributed generation firms. While CleanMax has been doing EPC (engineering, procurement and construction) work, their strength is rooftop solar,” said a third person, requesting anonymity.

Queries emailed to the spokespersons of Warburg Pincus and CleanMax Solar remained unanswered.

Declining solar power tariffs have resulted in fewer clean energy deals in the grid-connected space because of concerns that electricity offtake commitments at higher tariffs may not be honoured. This has resulted in interest in distributed generation projects such as rooftop solar.

CleanMax Solar claims to be India’s largest on-site solar power provider with a combined on-site capacity of around 80 MW.