The India-focused impact investment platform will acquire a significant minority stake in Amp Energy. The investment, to be announced shortly, will help form the beachhead for Lichtenstein investor LGT, a bank and fund manager with around $220 billion of assets, to foray into the Indian subcontinent’s energy market.
LGT Lightstone Aspada, the world’s largest family-owned private banking and asset management group, has already invested around $180 million in India, including a $12 million investment in Lithium Urban Technologies Pvt. Ltd—India’s first electric cab service. Going forward, it wants to focus on India’s energy-efficiency market, which is estimated at ₹1.5 trillion, in areas such as financing.
Formed in partnership with Aspada and LGT in August 2019, LGT Lightstone Aspada is an investment platform of LGT Lightstone. LGT Lightstone is part of LGT Group, owned by the Princely family of Liechtenstein.
“The transaction envisages an option to invest up to $50 million over the next 2-3 years. The transaction has already closed for the first infusion for a sizeable minority stake,” said Vignesh Nandakumar, partner, LGT Lightstone Aspada. Amp Energy is a global renewable energy utility with India, the US, Canada and Australia as its core markets. The local platform was co-founded by Pinaki Bhattacharyya, chief executive officer for India, and caters to commercial and industrial (C&I) customers from assets using solar, wind and storage. EY provided the tax advisory for Amp Energy India. “Set up around three years ago, Amp Energy India has raised around $60 million of capital from institutional investors and has a 500MW portfolio across 15 states. It aims to cross one gigawatt (GW) in the next two years,” said a second person aware of the deal, requesting anonymity.
This marquee deal comes at a time when credit availability for renewable energy firms has tightened with the drying up of debt financing. Large lenders, such as the State Bank of India, have curbed funding for projects selling power at less than ₹3 per unit. Most lenders are wary of the viability of projects with rock-bottom tariffs.
Queries emailed to Amp Solar Group and EY on 14 October did not elicit any response. “At LGT Lightstone Aspada, we believe that there is a significant opportunity in India and other markets to support businesses and consumers to move towards a more sustainable environment. Towards that thesis, we look to invest in businesses that can deliver solutions in a commercially viable manner to help industry and consumers reduce their carbon footprint, and at the same time, evolve these ecosystems to reinforce an environmentally sustainable approach to growth,” said Nandakumar.
The yet-to-be-announced deal for Amp India comes at a time when the Indian renewable energy sector is going through a rough patch with delayed payments to generation utilities. The payment delays by state-run power distribution companies range from two months to 15 months, besides there are problems with non-allocation of land to wind-power projects, as well as transmission and connectivity challenges.
This article was first published on livemint.com