Morgan Stanley to invest 1,200cr in wind power in India

The private equity arm of Morgan Stanley will hold majority shares in the power generation company co-founded by Essar Group director Vikas Saraf and investment banker Arvind Bansal.

This is one of the biggest private equity actions in the Indian wind energy space and coincides with the mounting troubles of conventional power suppliers due to shortage of domestic coal and expensive imports.

In September last year, Goldman Sachs invested Rs 1,000 crore in ReNew Wind Power,acompany promoted by former Suzlon Energy COO Sumant Sinha.

Continuum Energy founder and CEO Arvind Bansal confirmed Morgan Stanley’s investment but declined to comment on financial details.

Investment bank o3 Capital advised Continuum Wind Energy on the deal, which closed last week. The three-year-old Continuum Wind was established when it acquired the power generation unit of European giant Vestas in Gujarat’s Kutch region.

Continuum operates 36MW wind farms at Kutch and Sangli in Maharashtra, and is in advanced stages of building 183 MW assets.

Another 300MW is also in the pipeline."The backing of Morgan Stanley is an enabler to build large,highquality wind power assets in India’s energy-deficient market," Bansal told.

India’s wind energy sector has witnessed almost 30% annual capacity growth over the past decade. India has the world’s fifth largest installed wind power capacity of about 16,000MW.

There’s further development of the domestic potential (estimated at 100,000MW) with the government insisting that state utilities procure a percentage of their power needs from renewables.

Wind energy generation costs have steadily dropped and are now at grid-parity levels in many states,making it an attractive opportunity for long-term investors chasing India’s energy consumption.

Morgan Stanley Infra Partners will own majority shares in Continuum Wind Energy tThe deal is one of the biggest by PEs in the Indian wind energy sector, which is growing 30% annually. Wind energy generation costs have dropped to near grid-parity levels in many states, making it attractive.