GE Energy buys 49% stake in London Stock Exchange listed Mytrah Vayu

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Mumbai | Published: August 5, 2016 6:26:33 AM

MEPL, which is listed on London Stock Exchange's Alternative Investment Market (AIM) plans to build and operate 3,500 MW of renewable power assets in India.

GE Energy will invest $31 million in Mytrah Vayu (Tungabhadra) Private (MVTPL), a wind energy subsidiary of Mytrah Energy Private Limited (MEPL), to acquire 49% stake in the project. MEPL, which is listed on London Stock Exchange’s Alternative Investment Market (AIM) plans to build and operate 3,500 MW of renewable power assets in India.

It has built a portfolio of over 826 MW of operating wind plants in India and plans to increase the total output to 1,000 MW by mid-2017 and has assets spread across 11 wind farms in 8 states – Rajasthan,

Gujarat, Maharashtra, Andhra Pradesh, Telangana, Punjab, Karnataka and Tamil Nadu.
The company has in the past raised investment from a host of investors which include Apollo Global Management Llc, Merrill Lynch International and IDFC together, which together hold about 25% in the Indian unit, while founder Ravi Kailas and family own the rest. The company has recently announced plans to raise around $300 million by listing its India unit. Additionally, the company is also looking to sell stake to private equity investors and is believed to be in talks with prospective investors for a while now.

“Attracting investment from GE is a huge endorsement of Mytrah’s operations and its growing position in India’s power market, and we are delighted to have successfully completed this fund raising,” said Ravi Kailas, chairman and CEO, Mytrah Energy.

According to CRISIL by 2020, India’s solar and wind power sectors are expected to at least double their capacity from the current 24 gigawatt (gw). This, however, involves high capital cost so lower interest rates and longer-tenure funding are an imperative.
As such alternative sources of financing will be critical for solar and wind power sectors. CRISIL estimates that solar and wind power projects will need atleast R3 lakh crore in the next five years to double capacity.

Of this, about 70% (R2 lakh crore) will have to be funded through debt. But the ability of banks to cough up monies is limited given low appetite for renewable projects and crowding-out by conventional power sources.

The ability of banks to fund longer-tenure debt with attractive interest rates is also constrained because of asset-liability mismatch risks.

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