New Delhi: Attracted by India’s green energy trajectory, LGT Lightstone Aspada plans to invest up to $50 million in Canadian firm AMP Solar Group’s India unit, said several people aware of the development.

The Princely Family of Liechtenstein’ India focused impact investment platform will acquire a stake of around 26% in the green energy firm. The investment, to be announced shortly, will help form the beachhead for Swiss investor LGT, a bank and fund manager with around $220 billion of assets, to make further forays in the Indian subcontinent.

Going forward, the world’s largest family-owned private banking and asset management group' platform wants to focus on India’s energy efficiency market that is estimated at ₹ 1.5 trillion in areas such as financing. LGT Lightstone Aspada has already invested around $180 million in India and had put in $12 million in Lithium Urban Technologies—India’s first electric cab service.

“The transaction envisages an option to invest up to $50 million over the next 2-3 years. The transaction has already closed for the first infusion for a sizeable minority stake," said Vignesh Nandakumar, partner, LGT Lightstone Aspada.

Formed in partnership with Aspada and LGT in August 2019, LGT Lightstone Aspada is an investment platform of LGT Lightstone. LGT Lightstone is part of LGT Group, owned by the Princely Family of Liechtenstein.

Canada-based AMP Energy is global renewable energy utility with India, US, Canada, US and Australia as its core markets. AMP Energy India platform was co-founded by Pinaki Bhattacharyya, chief executive officer for India and caters to Commercial and Industrial (C&I) customers from assets using solar, wind and storage. EY provided the tax advisory for AMP Energy India.

“Set up around three years ago, AMP Energy India has raised around $60 million of capital from institutional investors and has a 500 MW portfolio across 15 states. It aims to cross one gigawatt (GW) in the next two years," said a second person aware of the deal requesting anonymity.

This marque deal comes at a time when credit availability for renewable energy firms has tightened with drying up of debt financing. Large lenders such as State Bank of India have been restricting funding to projects that have committed to sell power at less than ₹ 3 per unit as they are wary of the viability of projects that have agreed to sell power at rock-bottom tariffs.

Queries emailed to AMP Solar Group and EY on 14 October are yet to be answered.

“At LGT Lightstone Aspada, we believe that there is a significant opportunity in India and other markets to support businesses and consumers to move towards a more sustainable environment. Towards that thesis, we look to invest in businesses that can deliver solutions in a commercially viable manner to help industry and consumers reduce their carbon footprint, and at the same time, evolve these eco-systems to re-inforce an environmentally sustainable approach to growth," said Vignesh Nandakumar.

The deal for Amp India, to be announced shortly, comes even as Indian renewable energy sector is going through a rough patch with delayed payment to generation utilities. With record low solar and wind power tariffs, banks are wary of lending to developers as they suspect the viability of projects that have agreed to sell power at rock-bottom tariffs. There are other problems such as delay in payment by state-run power distribution companies that range from two months to 15 months and non-allocation of land-to-wind power projects, as well as transmission- and connectivity-related challenges.

“With this thesis in mind, we have started investments in the areas of electric vehicles, high efficiency mobility and in renewable energy supply and services for businesses. Our investment in Amp Energy's India platform is in line with this approach, which also has the benefit of investment from an internationally recognized renewable energy leader, and a strong local management team," Vignesh Nandakumar added.

India is confident of meeting the target of 450 GW of renewable energy by 2030. While 83,000 MW of clean energy capacity has already been set up, 29,000 MW is under construction with 30 GW under the bid process.