Mumbai: CLP India Pvt. Ltd, one of the largest foreign investors in India’s power sector, is looking to enter the solar energy sector as part of the parent’s push to increase the share of renewables in its portfolio, a top company official has said.

The local unit of Hong Kong-listed CLP Holdings Ltd is planning to invest about $1 billion for setting up over 1 gigawatt (GW) of solar power capacity over the next 3-5 years, Mahesh Makhija, director-business development (renewables), said in an interview on Friday.

CLP India will bid for solar projects under Jawaharlal Nehru National Solar Mission (JNNSM) and invest in projects won by others, Makhija said.

India needs as much as $200 billion to meet its target to install 100 GW of solar power and 60,000 megawatts (MW) of wind power by 2022.

This has seen global investors, including the renewable energy companies and pension funds, make a beeline for the country.

Among the companies CLP India is talking to is Suzlon Energy Ltd, for buying an initial stake of up to 49% in a 100 MW project the latter won at a tariff of ₹ 5.59 per kilowatt hour (kWh) in Telangana under the JNNSM in August 2015. The project has a cost of over $110 million (about ₹ 740 crore).

The 100 MW plant is a part of a 210 MW project for which Suzlon received letters of interest (LoI) in January and has signed long-term power purchase agreements (PPAs) with state utilities. Suzlon will still build the project on engineering, construction and procurement (EPC) basis and hold 51% for a year after commercial operation date, as mandated by the PPA.

“We are looking at the companies that have already bid for projects and won them and are looking for investors... There are some good opportunities available in the market and we are looking at them actively," Makhija said.

Suzlon did not respond to an email query sent on Monday.

CLP India is one of the largest wind power developers in the country with a capacity of about 1,000MW spread across six states and is the latest to announce an entry in the fast-growing solar energy market, which in recent months has seen overseas power firms, including Finnish utility Fortum Oyj, make large investment commitments.

“Anyone, who was—not just in wind—but any part of the power sector, is seeing that the growth opportunity in solar is much larger. The sense that we are getting is everyone, who has been in either traditional or renewable power generation business, is actively looking at solar in some way or the other," said Jasmeet Khurana, associate director (consulting) at Bridge to India, a boutique consultancy.

A number of renewable energy producers are also looking for investors and partners to finish their pipeline of committed projects.

Canadian solar energy developer SkyPower Ltd said on 13 May it has entered into an agreement with Chinese battery technology firm BYD Co. Ltd to submit joint bids in the upcoming tenders for solar power projects.

Indian conglomerates, such as the Tata Group and Mahindra, are also looking to quickly add new solar capacities, buoyed by further growth in the sector.

Others such as US-based SunEdison Inc. and Japan’s SoftBank Group have also won solar projects at aggressively bid tariff of ₹ 4.63 in November and December, respectively.

SunEdison too is looking to attract investments in all its India projects, according to its Asia Pacific president Pashupathy Gopalan, Mint reported on 22 April.

CLP India operates more than 3,000 MW of power capacity across its wind, coal-fired and gas-based projects. It operates the 650MW gas-fired Paguthan plant in Bharuch, Gujarat, and a 1,320MW coal-fired power plant in Jhajjar, Haryana. It had signed a memorandum of understanding with the Gujarat government to build a 1,000 MW imported coal-based power plant, which is expected to come up beyond 2018.

In January 2015, CLP India said it would invest about $2 billion for expanding projects in the country.

Solar energy tariffs in India have become extremely competitive, falling to a record-low of ₹ 4.34 a unit in January as overseas and local renewable energy firms bid aggressively to win projects under the government provided solar parks. These solar parks provide ready infrastructure and land for developers to build projects, reducing any risks and helping bring the cost of energy down. Recent auctions have also seen several companies winning projects at ₹ 5 or above levels.

The tariffs at present are at least ₹ 0.15-0.20 lower than what the fitms would have liked them to be at, mainly due to stiff competition, Khurana of Bridge to India said.

“Solar has now become manageable in the country as far as the tariffs are concerned. When at ₹ 18, the tariffs were too high to be sustainable. With tariffs coming down we thought it was a good time to start solar. Last couple of years we’ve been making a lot of effort to put up a bid together," Makhija said.

CLP Holdings, founded in 1901 as China Light and Power Co. Ltd, was among the two significant overseas entrants in India’s power generation sector along with US-based AES Corp. AES decided to wind up most of its operations in the country, retaining only a stake in an Odisha power project.

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