New Delhi: Spain’s Zelestra plans to invest $5 billion in India to build 10GW of wind and solar power capacity by the end of the decade, a top executive said, doubling its previous target of achieving 5GW by 2026. The company, backed by private equity firm EQT, may also enter India’s lucrative commercial and industrial sector as part of the expanded plan, chief executive officer Leo Moreno said in an interview.
Typically, renewable energy projects raise 30% equity and 70% project finance, but given the strong backing from EQT, Zelestra won’t need to raise any external equity, Moreno said. “We put our own equity to do all the development, and we invest our own equity when we build the projects. So, that creates an advantage for us in terms of the cycle and how much we can spend early to build,” he said.
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Zelestra, which operates in countries such as the US, Germany, Colombia, Chile, and Peru, believes India’s renewable energy market holds potential. “We’re now talking about going to 10GW by 2030. And it (India) is a market that can support this type of bold, ambitious growth and multi-technologies. We already have PPAs awarded in winning storage combination of wind, solar, and storage. So, it really represents the strategy of the company.”
Zelestra is not alone in tapping into the Indian opportunity. Some major global clean energy firms and investors currently operating in India include Sembcorp, Gentari, Brookfield Renewables, BlackRock, and Mubadala.
Moreno noted that globally, Zelestra plans to take its installed capacity to 45GW by 2026, with countries such as India and the US playing a key role. He said that apart from India and the US, it would focus on Latin America, Southern Europe and Germany.
Speaking on the regulatory concerns globally over supply chain diversification for solar modules to limit the dominance of China, he said that such moves may have a short-term impact, but would be beneficial in the longer run.
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Moreno said India has passed certain laws to support the domestic solar industry, at a time when Chinese companies command 95% of the global wafering capacity. The US had also done the same as India, he said, adding the supply chain will normalize as local entities build capacity over time. Such measures are a path to have more security of supply, Moreno said, calling it “a period of instability that leads to a future of more prosperity.
The combination of enormous demand, government targets, the ease and speed to grow, and the appetite of investors make India compelling place to invest, Moreno said. “Today international investors have a pretty positive view about India, and expect future stability of the market. So, that is appealing,” he said.
