Morgan Stanley hires Citi to find a buyer for CGE stake

August 8, 2021

US investment bank Morgan Stanley has hired Citibank to find a buyer for its majority stake in clean energy firm Continuum Green Energy (India) Pvt. Ltd, two people aware of the matter said.

Continuum, which has 807.4 megawatts (MW) of operational wind and solar assets, also has 1.07 gigawatts (GW) capacity under various stages of development. Morgan Stanley has around 83% stake in the clean energy platform founded by Arvind Bansal and Vikash Saraf in 2009.

North Haven Infrastructure Partners, a global infrastructure fund managed by Morgan Stanley Infrastructure Partners, had in 2012 invested $212.03 million in Continuum.

The proposed transaction comes in the backdrop of large deals returning to India’s green energy space, the latest case in point being private equity firm Actis Llp evincing interest in US-based Global Infrastructure Partners’ (GIP’s) Indian clean energy platform Vector Green Energy.

Also, Canadian pension fund Ontario Municipal Employees’ Retirement System (OMERS) recently announced its plan to purchase 19.4% stake in NYSE-listed Azure Power Global Ltd for $219 million and Thailand’s state-owned energy major PTT Group announced its acquisition of 41.6% stake in Avaada Energy Pvt. Ltd for around $454 million.

“Citibank has been given the mandate for selling Morgan Stanley’s stake in Continuum Green Energy. The process has started," said one of the two people cited above, requesting anonymity.

The Continuum stake sale plans have been on for some time now. ReNew Power Ventures Pvt. Ltd had evinced interest in buying Morgan Stanley’s majority stake in Continuum Green Energy, as reported by Mint earlier. Norway’s state-run electricity firm Statkraft and US-based renewable energy producer SunEdison Inc. had previously tried to acquire Continuum.

Spokespersons for Morgan Stanley and Citibank declined comment.

“We do not comment on market speculation," Continuum’s chief executive officer Bansal said in a message in response to a query on Morgan Stanley’s stake sale plans.

“As a policy, we do not comment on market speculation," a ReNew Power spokesperson said in an emailed response.

Investors’ interest in India’s green economy continues unabated in the backdrop of a growing demand for electricity. India is running the world’s largest clean energy programme and has an installed solar power generation capacity of 42.33GW, 36.88GW under implementation and 19.76GW under the tendering process.

In a reaffirmation of India’s push for green energy sources, solar and wind generation recorded an all-time high of 43.1GW on 27 July. The country’s solar energy generation is on an upward trajectory and increased by 54% from 39.27 billion units (BUs) in 2018-19 to 60.40 BUs in 2020-21.

As reported by Mint, there are a raft of green energy deals in play. These include the promoters of Cleantech Solar Energy planning to sell their controlling stake in the green energy firm backed by Royal Dutch Shell and Singaporean conglomerate Keppel Corp among suitors for Warburg Pincus LLC’s majority stake in rooftop solar power producer CleanMax Enviro Energy Solutions Pvt. Ltd. Also, Norway’s state-owned Norfund and TPG Capital’s The Rise Fund announced their $100 million and $25 million investment, respectively, in Hyderabad-based Fourth Partner Energy recently.

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