Pan-Asian renewables platform Blueleaf Energy is keen to secure firm power contracts in India as it races to quadruple its installed renewables projects within five years, writes Rouhan Sharma.

Blueleaf Energy, owned by a fund managed by Macquarie Asset Management, will focus on building greenfield projects and acquisitions to get to its 5 GW target in India by 2030, a senior official told Infralogic.

It currently has 1.3 GW of construction and late-stage development projects, of which it expects to commission about 400 MWp this year, said Country Head Pratyush Thakur. The remaining 900 MWp will start operating in 2026.

The dual approach involving new development as well as buyouts is necessitated, in part, by the nature of the market, “given the long waiting list for grid connections that goes all the way to 2032 in Rajasthan and up to 2028 in other states,” said Thakur.

India’s National Electricity Plan estimates INR 9.1trn (USD 107.1bn) will need to be spent up to 2032 to build more electricity transmission systems to keep pace with peak power demand. This is projected to be 458 GW by that time up from 250 GW in the last financial year through March 2025.

India added a record 30 GW last fiscal year, taking total installed renewables capacity to 220.1 GW, according to a 10 April government statement. The Narendra Modi-led administration is aiming for the country to reach 500 GW of renewables by 2030.

Growth strategy
While Blueleaf’s greenfield strategy will involve similar deals to the one it concluded with Noida-based Jakson Green in January — investing USD 400m in a development-stage portfolio — it sees acquisition opportunities arising from contractors aiming to become independent power producers, said Thakur.

“It’s not easy being both an engineering, procurement and construction (EPC) company and an asset owner; some of these companies will probably look to sell their projects, and this is where we see a very complementary fit for us because we are a long-term asset owner in the mould of an independent power producer,” he said.

EPC contractors looking to become asset owners is not a new phenomenon, though, and while there are examples of those that have successfully transitioned, industry observers said that there are also those that may be struggling to operate their projects efficiently.

“EPC players can be successful IPPs if they treat asset ownership as a separate strategic vertical, deploy the right capital, develop their capabilities to manage their assets and have proper governance mechanisms,” Partner and Leader – Energy and Climate at Grant Thornton Bharat, Amit Kumar said.

An entity that combines both capabilities can ensure better margins and be more competitive while bidding for projects compared with pure IPP players, he added.

Firm power
With the Indian government prioritising hybrid projects that include solar and wind, batteries and other forms of round-the-clock power supplies, Blueleaf is keen to also add firm and dispatchable renewable energy (FDRE) to its portfolio.

Being an institutional investor-backed platform, Blueleaf values firm power contracts, said Thakur.

“We are open to innovative offtake structures, that includes taking merchant power market risk. We can understand and underwrite that risk, and the price discovered in the market indicates that the return levels are reasonable compared to that risk,” he said.

This is reflected in Blueleaf’s first project, a merchant power plant from which it will sell the entire electricity produced by it in the power markets. The project has risk protections from a contract for selling environmental attributes as well as an insurance price from a power trader, said Thakur.

Given that there is some oversizing required to cater to FDRE contracts, this exposes a project to market prices, said Thakur, adding that Blueleaf’s experience of managing a merchant project gives it valuable insights to structure firm power contracts well.

While FDRE tenders are likely to pick up pace, given the rapid buildout of renewable energy plants, the challenge for institutional investors is with respect to technological advancements in battery energy storage systems, said Kumar.

Since the cost to build a firm power project is roughly double that of a solar or wind project, those entering this segment will likely take a platform approach with investments of at least USD 1bn, he added.

“The concern then is with respect to whether this will be sustainable in two to three years because if there is a technological breakthrough for battery energy storage systems, it is the new projects that will be viable and not the old ones,” said Kumar.

“The only saving grace is if you have a power purchase agreement with government entities, they will continue to honour these long-term contracts.”

Selling the electricity on the power markets would be a risk, and Kumar suggests that companies should look at only those assets in the next one year where there is a PPA with a government entity.

Project finance
Of the USD 400m to be invested in Jakson Green, Blueleaf will raise USD 300m of debt, spread across three projects, said Thakur.

For the first project, a loan agreement has already been signed with a large domestic bank, he said, declining to provide details.

For the other two projects, which are the larger ones, it expects to achieve financial close by the end of December 2025. It is working on both local and international financing options to support these projects, Thakur said. He did not identify the projects.

[Editor’s note: The lead has been amended to show Blueleaf Energy is owned by a fund managed by Macquarie Asset Management.]