In September 2017, Abraaj and ENGIE announced a partnership to develop a wind power platform in India. Through a robust pipeline of wind power projects of over 1GW in key states across the country, the partnership will address a growing demand for affordable, reliable and sustainable energy.
Here, we speak to Saad Zaman, Partner at Abraaj, on the compelling opportunities in the Indian renewables sector, Abraaj’s partnership with ENGIE and commitment to clean energy across growth markets.
Q: This is the second clean energy platform Abraaj has developed in India, following a partnership with Aditya Birla Group to build a 1GW solar energy platform. What makes the renewables sector in India so compelling?
Saad Zaman: As longstanding investors in India, we are committed to the country and observe long-term compelling investment opportunities. Energy demand is growing tremendously in India with a gap for clean power due to demographic growth and the government’s commitment to pursue clean energy transformation. Power consumption in the country is expected to grow at 9% year-on-year until 2020 which means a need for over 100 GW of installed capacity.
Specifically, the Indian government’s target of 60 GW of wind power capacity by 2022 will require a near doubling of the current installed capacity of 32 GW over the next five years. Additionally, renewables in India are aided by strong policy and regulatory support such as the Uday scheme, the Green Corridor Initiative, and the National Investment and Infrastructure Fund.
With our joint expertise, the platform is in a strong position to bridge the gap that demand conveys. We are also enthused by the positive impact our partnership with ENGIE will deliver to Indian businesses and residential homes. The platform is expected to generate sufficient electricity to power 1.4 million homes in India and will help reduce over 15 million tonnes of carbon dioxide emissions over the lifetime of the project(s).
Q: How does Abraaj plan to develop a Wind Power Platform with ENGIE in India?
Saad Zaman: First, Abraaj has deep local connectivity through our on-ground presence in India and global expertise through our clean energy platform. Second, our partner, ENGIE, is the largest independent electricity producer in the world with 112.7 GW of installed capacities, of which 20% is from renewables. Merging such robust global expertise and operational experience is integral to the successful implementation of the wind platform.
An immediate core focus for the platform will be to leverage our technical, sectoral and management experience and address strategic nuances of state and project selection, by ensuring that the overall project finance structure is robust and the permits are in place. We are also hands-on in working alongside developers to navigate all development aspects, including technical execution, policy and regulation support, and mitigation of project risks.
Q: In broad terms, can you discuss Abraaj’s Clean Energy focus in growth markets?
Saad Zaman: Sure. Clean Energy is a key pillar in our dedicated Impact Investing platform, which focuses on addressing the Sustainable Development Goals (SDGs). We strongly believe that the private sector is a key stakeholder in spearheading the SDGs. As such, we deploy private capital, with a focus on financial and non-financial returns, to tackle some of the world’s most pressing challenges – a crucial one is bridging the demand for clean energy to meet the gap across our markets.
Our partnership with ENGIE in India is a compelling addition to our Clean Energy portfolio. This transaction is the second wind platform for Abraaj. As a Group, we have invested over US$ 1 billion in the energy sector, and are advancing clean energy projects spanning more than 3 GW of capacity across our markets. In the next three years, our projects will collectively power 1.5 million households and reduce over 20 million tonnes of CO2 emissions.
Read the press announcement of the transaction here: The Abraaj Group and ENGIE to Develop a Wind Power Platform in India