Italy’s Enel Green Power acquires a majority stake in BLP Energy

September 25, 2015

MUMBAI: Five years after he started his entrepreneurial journey in clean tech after a high-profile stint in General Electric as its CEO in India, Tejpreet Singh Chopra on Thursday sold a controlling stake in his flagship wind power generation division BLP Energy for Rs 220 crore to Italy’s Enel Green Power, the renewable arm of the country’s leading utilities group Enel. Both sides did not disclose the exact shareholding in their official communique, but sources say EGP will end up controlling close to 60% of BLP Energy, implying an equity valuation of Rs 370-Rs 380 crore for the entire company.

Paving its way for its India debut, this will also be Enel’s Green first acquisition in the Asia-Pacific region and help reach more than 10 GW of net installed global capacity. “This acquisition opens the doors for Enel Green Power to the huge potential of the Indian market and is the gateway to further expansion across Asia,” said EGP CEO Francesco Venturini. “We intend to contribute to the Indian government objective of increasing the share of renewables in the country’s energy portfolio. EGP is also interested in participating through BLP Energy in the country’s upcoming public solar tenders at both national and state level.”

BLP owns operating wind plants in Gujarat and Maharashtra with a total capacity of 172 MW and a total annual production of about 340 GWh. It also has a portfolio of approximately 600 MW of wind projects in different stages of development. Chopra will continue to be at the helm along with other senior management executives.

Started in 2010, BLP Energy has grown primarily via acquisitions. In 2013, it acquired the 150 MW operating wind power portfolio of real estate major DLF for an enterprise valuation of Rs 670 crore. The funds will help BLP Energy expand its portfolio. With new money coming into the company, BLP’s existing early stage investors–DFJ, VenturEast and UTI Capital which own two-thirds of BLP’s holding company–are not cashing out just yet.

Analysts say these three investors together have pumped in close to Rs 150 crore across various BLP entities in India and Singapore. Cornell alumni Chopra has had discussions with European utility majors such as EDF for a joint venture to set up greenfield wind energy assets. But those discussions did not fructify.

ET was the first to report the deal in its June 12 edition. “We are both long-term players. With Enel’s engineering expertise plus balance sheet strength we can now look to seriously build a business of scale given the market opportunity. They have been studying the market for a long time but once they were settled, they closed the deal at the quickest time,” said Chopra. “It brings together the global expertise of EGP and the local market understanding of the BLP Group.”

“Although conventional side of power is seeing waning interest, the renewable space is being chased by both financial and strategic investors,” said Sawan Kumar, executive director, UBS Investment Bank.

“It is less cumbersome, not very capital intensive and takes less time to set up a cleantech power plant and thanks to the government push and reforms there is a lot of interest from international players.”

UBS was financial advisor to the deal and J Sagar Associates acted as legal advisor to BLP Group. Enel Green Power is the renewable focussed international arm of the Enel Group with operations in Europe, the Americas, Africa and Asia. With a generation capacity that corresponds to approximately 32 billion kWh in 2014 from water, sun, wind and the Earth’s heat – enough to meet the energy needs of more than 11 million households – Enel Green Power is a world leader in the sector.

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