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Macquarie Asia Infrastructure Fund Enters Indian Solar Market
According to media reports, Hindustan Powerprojects Limited plans to sell some of its solar power assets to MAIF as the former looks to expand its global solar business.Hindustan Powerprojects has less than 300 MW of operating solar power generation capacity in India, with an additional 150-200 MW of solar projects under construction. The company is reportedly seeking to sell approximately half of its installed solar capacity to MAIF.
This is not the first case in which Indian developers have tried to raise funds for expansion by selling stakes or entire assets to interested buyers.
Typically in this context, Hindustan Powerprojects already has a substantial presence in developed markets such as the UK, Germany, Italy and Japan. As competition in the Indian market intensifies, these international markets will become the focus of domestic enterprises' external expansion. Hindustan Powerprojects plans to have overseas installed solar capacity reach 2 GW by 2022.
Through this acquisition, Macquarie can naturally enter the Indian solar power generation market. Macquarie's advantage from Hindustan Powerprojects is that the company was one of the first entrants to the Indian solar power market.
The company built India's first large-scale solar project in 2010. At that time, the tax rate for solar power generation was as high as 17.91 rupees/kWh (kWh).
However, it remains unclear which projects Hindustan Powerprojects will sell to MAIF. However, with the bundling of power projects by companies owned by state governments and the central government, the income of the Indian solar energy industry will be stable in the next 20-25 years.
