Augment Infra to acquire majority stakes of Warburg Pincus, IFC in CleanMax

US investment firm Augment Infrastructure will acquire majority stakes in Warburg Pincus LLC and International Finance Corp. (IFC) in its rooftop solar power producer CleanMax Enviro Energy Solutions Pvt. Ltd. for Rs crore. The transaction's value includes new investments in Mumbai-based CleanMax.

“This will include the acquisition of Yellow Bell Investment Ltd.'s stake” (a subsidiary of Warburg Pincus, a leading global private equity firm focused on growth investments) and the International Finance Corporation (IFC) in CleanMax along with a primary capital investment in the company to finance its own growth pipeline. UK Climate Investments (UKCI) will remain an investor and a member of the board, the two companies said in a joint statement on Thursday.

Rothschild & Co. as a sales consultant. B2B had reported on October 25 that Warburg Pincus was exploring the sale of the stake. Singaporean conglomerate Keppel Corp. was among the applicants for a majority stake in Warburg Pincus LLC.

The transaction is a reaffirmation of the growing consolidation of the commercial and industrial (C&I) sector and comes amid a growing focus on environmental, social, and governance (ESG) investment. Given the regulatory risks to green energy contracts and their compliance in many states, investors are increasingly looking to the C&I space because it is generally insulated from risks such as reduced power purchases and state-run trading rates by distribution companies (Discom).

Many C&I agreements are in the works. For example, the promoters of Cleantech Solar Energy plan to sell their majority stake in the green energy company which is backed by Royal Dutch Shell as reported by B2b. Norway's state-owned Norfund and TPG Capital's The Rise Fund recently announced their investment of $ 100 million and $ 25 million respectively in Hyderabad-based Fourth Partner Energy. Private equity firm Actis Llp plans to invest $ 850 million in India to build two green energy platforms, one of which will serve the C&I sector.

“This is Augment Infrastructure’s first investment in an Indian C&I renewable energy company," said Darius Lilaoonwala, managing partner, Augment Infrastructure in the statement.

In July 2017, CleanMax said it had obtained $ 100 million in financing from Warburg Pincus. UKCI, a joint venture between Green Investment Group and the UK government's Department for Trade, Energy, and Industrial Strategies, is the company's other investor. Macquarie Infrastructure and Real Assets manage UKCI.

“We are happy to note that both global investors will secure an exit, which is always a responsibility of the management team to deliver upon. I am also delighted to note that over 150 CleanMax colleagues, present and past, are securing a part exit on their ESOPs," Kuldeep Jain, founder and managing director of CleanMax said in the statement.

CleanMax's operating capacity has increased from 24 MW in 2015-16 to around 750 MW now. CleanMax's portfolio includes 380 MW of large-scale solar farms in Karnataka and Tamil Nadu that supply corporate customers with electricity, as well as 220 MW from rooftop solar projects. It has also expanded its portfolio in West Asia, with 30 MW in the UAE, and is looking to expand further in Southeast Asia. They have got their first project in Thailand.

“While the primary capital raised by CleanMax will support our strategic expansion efforts to continue building our customer base and add around 400 MW of new capacity annually. We are excited with our aim to enhance our operating capacity from 760 MW to around 2000 MW in the next 3 years," Nikunj Ghodawat, the chief financial officer of CleanMax said in the statement.

Abundant offerings in the clean energy field in India. Attracted by India's green economy, Canada's Ontario Municipal Employees Retirement System (OMERS) announced its plan to purchase a 19.4% stake in New York-listed Azure Power Global Ltd for $ 219 million from the International Finance Corporation and IFC GIF Investment Company. Thailand's leading state-owned group PTT also recently announced the acquisition of a 41.6% stake in Avada Energy Pvt Ltd for approximately $ 454 million.

India is implementing the world's largest clean energy program to achieve 175 GW of renewable energy, including 100 GW of solar energy by 2022. 40 GW of rooftop solar projects are expected to come from solar energy

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