Singapore’s Keppel buys Shell’s 49% stake in Cleantech Solar for $200mn, plans to flip company for $400mn

Keppel currently owns 51% of Cleantech.

Keppel Corporation Ltd, Keppel Asia Infrastructure Fund LP (KAIF) and KAIF’s co-investor had acquired a 51% stake in Cleantech Renewable Assets Pte. through Cloud Alpha Pte Ltd. Ltd in 2021 for $150 million. The remaining 49% shares belonged to Shell. Keppel Corp. was renamed Keppel Ltd in early 2024. Cleantech Renewable Assets is the holding company for Cleantech Solar.

Cleantech Solar has a portfolio of 1.2 gigawatts (GW) of solar and wind assets in operations, construction and development in India, Singapore, Cambodia, Indonesia, Malaysia, Thailand and Vietnam; 1 GW of this is in operation.

Spokespeople for Shell and Cleantech Solar confirmed the sale.

In an emailed response, a Shell spokesperson said: “Shell Singapore Pte Ltd, a wholly owned subsidiary of Shell plc, has agreed to sell its 49% stake in Cleantech Renewable Assets Pte Ltd to a subsidiary of Keppel Ltd. This decision is consistent with Shell’s business strategy and focuses on performance, discipline and simplification.” “It’s consistent with greater focus.”

“Keppel Ltd. and its managed fund, Keppel Asia Infrastructure Fund, have agreed to acquire Shell Singapore Pte Ltd.’s 49% stake in Cleantech Renewable Assets Pte Ltd. This is an exciting new chapter for Cleantech Solar. The company is backed by the support of committed shareholders and partners and, importantly, a strong and dedicated team.” “Cleantech is well positioned for growth and success with Solar.” the spokesperson said in an email.

Questions emailed to a Keppel spokesman on Thursday evening remained unanswered.

Opportunities abound

This deal comes against the background of Shell’s plans to sell the Sprng Energy group, which it acquired from Actis Llp for an enterprise value of $1.55 billion, in 2022. (A company’s enterprise value, or total economic value, includes its equity value, debt, and other liabilities net of cash and equivalents.)

In response to a question about the status and value of the Sprng Energy group transaction, a Shell spokesman added: “We continually review our portfolio to deliver on our strategy. We will not comment on market speculation. Sprng remains focused on safe and reliable operations.”

This also comes as global oil majors including Shell, Total of France, Thailand’s PTT Group and Malaysia’s state-run Petronas unit Gentari Sdn Bhd are establishing a presence in India’s green energy sector as the traditional hydrocarbon space faces disruptions.

There is a growing interest in green energy in India’s commercial and industrial (C&I) segment; The latest example is that Terra Clean Ltd, the renewable energy unit of Indian Oil Corp., the country’s largest oil refiner and marketing company, plans to acquire a 50% stake in renewable energy company Fourth Partner Energy Pvt. Ltd signed a deal with an equity value of around $400 million, as previously reported by Mint.

Analysts point to the massive C&I-focused green energy movement in India.

“With the C&I segment accounting for 45-50% of India’s electricity demand, achieving a 20% renewable energy (RE) penetration in the next five years will require a renewable energy capacity of 100 GW, implying a CAGR of 30%. This marks a significant increase from the current estimated open access capacity of 25-30 GW. In recent years, focusing on the C&I market, Large renewable energy platforms with portfolios of over 1 GW have emerged, rating agency ICRA wrote in a report.

Fast scaling

India’s C&I segment has attracted strong investor interest as the regulatory environment is supportive with rules allowing large energy users to source energy from the open market rather than from more costly grids. C&I projects are also protected against risks such as state-run energy distribution companies restricting energy purchases. Additionally, the State Electricity Regulatory Commissions’ implementation of Time of Day tariffs for consumers in the large C&I category, which vary depending on demand and time, also helped sustain investor interest.

There are many green energy deals where investment theses are driven by scale. India’s installed renewable energy capacity is 245 GW, of which 116 GW is solar and 52 GW is wind energy. India plans to reach 500 GW by 2030 by adding 50 GW of green energy capacity annually. Given the country’s trajectory towards green energy and its target of net zero by 2070, the plan is to add 1,800 GW of renewable energy capacity by 2047 and 5,000 GW by 2070.

Some of the transactions reported by Mint include Morgan Stanley and Mitsubishi UFJ Financial Group, Inc. (MUFG) initiated the sale process in October from Vena Energy India, the Indian green energy platform of Vena Global Group Pte Ltd, owned by Global Infrastructure Partners (GIP), in a deal with an enterprise value of approximately $1 billion.

Separately, European alternative asset manager EQT abandoned its plan to sell renewable energy developer Zelestra’s India operations and instead handed it over to its Asia Pacific infrastructure team led by Hong Kong-based partner Ken Wong. EQT will also invest around $600 million to develop the portfolio and has appointed Parag Sharma, former CEO and co-founder of EQT and Temasek-backed O2 Power, to head the company, replacing current CEO Sajay KV.