Shell, Canadian pension fund lead race for Actis PE’s solar portfolio Sprng Energy

UK-based energy major Shell and Canadian pension fund CPPIB are ‘frontrunners’ in the race for Actis PE’s over $1 billion solar energy portfolio Sprng Energy, according to sources privy to the development. Others in the fray include Arcelor Mittal, Australian fund Macquarie, Singapore-based Sembcorp and Adani group.

The last date for submission of binding bid for the asset is March 15 and sources said given the Russia-Ukraine war, the deadline is unlikely to be extended.

“The current Russia-Ukraine crisis will not affect the timeline for bid submission or the sale purchase agreement for the Sprng Energy platform. It will happen as per the initial plan,” the sources said.

Shell and CPPIB declined to comment on the questions related to valuations and fund-raising plan.

Sprng Energy platform received around 20 non-binding bids in the first stage; the six players mentioned above were subsequently shortlisted.

A Mumbai-based investment banker said on conditions of anonymity: “The Actis platform shall provide a substantial asset base for the suitor and price tag is expected to be more than a couple of billion dollars.”

The sale of Actis PE solar platform is billed as one of the largest deal in the renewable energy segment with an enterprise value of over $2 billion that includes a debt component of $900 million.

Sprng Energy is Actis’ second platform after Ostro Energy that was sold to ReNew Power Ventures in 2018 for $1.5 billion.

Sprng Energy has contracted around 2.6 gigawatts (GW) through long-term power purchase agreements, out of which 2.1 GW is expected to be functional by March 2022 and another 500 MW by March 2023. The operating profits for all contracted assets in FY22 is estimated to be $220 million.

Sprng Energy in 2021 acquired around 600 MW from Acme Cleantech and around 194 MW in 2019 from Shapoorji Pallonji Group’s solar energy portfolio.

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