Indian renewable energy company CleanMax Enviro Energy Solutions Private Limited has raised $360 million from Canadian investor Brookfield Renewable. With this, Brookfield Renewable has acquired a controlling stake in the company. This will allow CleanMax to maintain market leadership in the commercial and industrial (C&I) segment, and pursue its plans of becoming a 5 GW platform over the next three to four years.
Founded in 2011, CleanMax has been a front runner in providing green energy to multinational and large corporates, aiding their sustainability efforts and decarbonisation goals. It has helped over 350 corporate consumers adopt renewable energy. It manages a portfolio of over 1.6 GW of operating wind and solar projects and supplies over 3,076 GWh of green energy annually, helping offset about 2.5 million tonnes of CO2 every year.
Brookfield has made an equity investment through a secondary purchase of shares from existing shareholders, and primary capital infusion. It will work with existing shareholders and management to drive the platform’s growth in India’s C&I segment. The investment was made through Brookfield Global Transition Fund, Brookfield’s impact fund to accelerate net zero transition. The transaction will help deepen Brookfield’s presence in India, where it has deployed billions of dollars. CleanMax can leverage Brookfield’s global relationships, access to capital and operational expertise. Brookfield will now have over 9 GW of diversified assets across wind, solar and hybrid in seven Indian states. This will be Brookfield’s second major renewable deal in India this year, after its $1 billion investment in Avaada Ventures.
CleanMax is expected to continue growing its footprint in the renewable energy segment for C&I consumers, and the latest equity fundraising will serve as a lever. The company is also looking to explore growth avenues in the corporate renewable energy space, and assess and pursue other value creation drivers. Going forward, as Indian corporates increasingly decarbonise and align their operations to support the government’s net zero goals, the company will expand further.
“We will continue to invest in high-return projects”: Interview with Colonel Narendra Verma, COO (Utility Scale and Renewable Energy Projects), CleanMax
Could you tell us the details of the fund-raise? What are its key features and objectives?
This funding of about $360 million, which is a mix of primary and secondary funding, will enable CleanMax to pursue its growth plans of becoming an over 5 GW platform over the next three to four years. Through this investment, Brookfield Renewable will have a controlling stake in CleanMax, and will work with existing shareholders and management to drive the platform’s growth in India’s C&I segment. This will give us adequate growth capital for at least the next three to four years. With the large capital pool available from Brookfield, the company expects to maintain its market leadership in C&I, and be able to add about 800-1,000 MW annually to its C&I portfolio. As exhibited historically, the company will continue to invest in high-return projects, partner with quality customers, and deliver on-time and competitive cost execution of large projects. It shall endeavour to grow its C&I footprint in India and outside.
What are the company’s growth plans for the near future?
CleanMax will continue to remain a partner of choice for the C&I sector and help customers meet their sustainability and net zero goals. It intends to pursue its growth plans of becoming an over 5 GW platform over the next three to four years.
What are some of the issues and challenges in providing clean energy to corporate consumers? How are these being addressed?
The biggest challenge is the lack of a predictable and long-term policy framework to support the open access supply of green energy. While the central government has embarked on this mission and is constantly providing an impetus, policy support and infrastructure investments needed, the diverse policies at the state level, largely driven by local compulsions and discoms’ financial challenges, do not really support long-term investments. Frequent policy changes, the imposition of various unreasonable charges on green power, etc., create insecurity for investors and customers, thereby impacting actual investments. Challenges in land acquisition, local rights of way, interference from local power centres and power evacuation continue to plague and slow down growth. These need to be addressed by the administration and government, going forward.
What is your outlook for the power sector for the next two to three years, and your company’s role in it?
The C&I sector constitutes more than 50 per cent of energy demand and consumption. Given the aggressive targets companies have set for themselves and the nation, to become net zero by 2070 – even to reach our 2030 target of 280 GW of green energy – we will need to add more than 27 GW per year. The demand-supply gap is huge, and only increasing. I clearly see the C&I sector adding about 6-8 GW per year in the next two to three years, which should only increase. However, the challenges listed above will be some of the restricting factors.
