Bernstein suggests that new investments from Canada in Indian renewable energy companies might experience a slowdown in the near future – EQ
In Short : According to Bernstein, fresh investments from Canada in Indian renewable energy firms may experience a slowdown. This analysis suggests potential shifts in investment patterns, which could impact the pace of renewable energy projects in India. Understanding these market dynamics is essential for the renewable energy sector to adapt to changing investment trends and sustain its growth trajectory.
In Detail : Brookfield, another Canadian firm eyeing the Indian market, has an existing 4 GW portfolio. The company has invested $1 billion in Avaada Energy and $361 million in CleanMax
The diplomatic standoff between India and Canada is likely to affect Canadian investments in Indian renewable energy companies, which have received billions of dollars in past investments. The Canada Pension Plan Investment Board (CPPIB), which owns a 53 per cent stake in ReNew Power, may delay further investments in the Indian firm. The Indian government is also unlikely to permit CPPIB full control over ReNew Power, one of its largest renewable players, warned global brokerage firm Bernstein.
While this standoff does not affect any existing or pipeline projects, it diminishes the likelihood of CPPIB taking ReNew Power private, at least until further clarity emerges, Bernstein noted in a client advisory. ReNew Power, which has an operating capacity of 8.4 gigawatts (GW) and another 5.3 GW in the pipeline, will need to look elsewhere for capital, the firm added.
Bernstein does not foresee any immediate exits but anticipates a slowdown in incremental investments in the Indian renewable sector by Canadian funds. “A sustained visa blockage could be a significant factor; we’ve observed similar challenges for Chinese nationals obtaining visas, which led to project delays,” the brokerage cautioned.
In addition to ReNew Power, the Caisse de dépôt et placement du Québec (CDPQ) owns a 53 per cent stake in Azure Power, which has 3 GW of assets. A further 21 per cent stake in Azure is held by the Ontario Municipal Employees Retirement System (OMERS). CDPQ also has a 50 per cent stake in Apraava Energy, with 1.2 GW operating capacity.
Brookfield, another Canadian firm eyeing the Indian market, has an existing 4 GW portfolio. The company has invested $1 billion in Avaada Energy and $361 million in CleanMax. CleanMax has a 4.5 GW commercial and industrial (C&I) portfolio of operating assets and a project pipeline across India and other geographies.
Ontario Teachers’ Pension Plan holds a 30 per cent stake in Mahindra Susten, having invested $287 million. Mahindra Susten has an operating capacity of 1.3 GW and a 0.4 GW project pipeline.
India has an installed renewable capacity of 126 GW, and projects funded by Canadian firms play a vital role. Bernstein stated that delays in funding from Canada could put pressure on NTPC, a Government of India-owned entity, to finance India’s renewable growth. “While this could be beneficial for NTPC, we hope the renewable business is not spun off as a separate entity,” it said.
Regarding Adani Green, Bernstein noted that recent funding announcements from TotalEnergies of higher investments are a clear positive. However, Adani Green still has a large loan repayment of Rs 22,500 crore due in 2025. “This is evident in their absence from renewable tenders,” it concluded.
