Hongkong’s CLP Group has agreed to sell 40% equity stake in its Indian subsidiary, CLP India, to CDPQ, a Canadian pension fund. Meanwhile, Engie has also offered a 50% equity stake to STOA, a French institutional investor, in its wind business in India. These are just two recent examples of international strategic investors mitigating their India investment exposure.
- International strategic investors are drawn to India by the large market size but find operating environment incompatible with their low-risk approach;
- The willingness of financial investors to pay huge premiums for RE assets is aiding (partial) withdrawal of strategic investors;
- For India, the waning interest of strategic investors is a huge loss;
CLP India is one of the largest international utility investors in India with operational assets of about 3,000 MW comprising 1,975 MW of coal/ gas, 100 MW solar and balance wind. After initially focusing on thermal power plants, the company has been reorienting itself towards RE by building FIT-based wind projects (pre-2017) and acquiring development phase solar projects from Suzlon. Notably, the company has so far refused to participate in any auctions.
CLP and Engie are not the only international investors to reduce their exposure. Previously, Fortum sold a majority stake in its 185 MW solar portfolio to UK Climate Investments (40%) and Elite Alfred Berg (14%). EdF has entered into a 50:50 JV with SITAC, an Indian developer. Singapore based Sembcorp – with a total operational portfolio of 900 MW – is also looking for a partial exit through listing of its Indian business.
Figure: Leading RE developers in India

Source: BRIDGE TO INDIA research
India is potentially a very attractive market for the deep pocketed utilities from around the world. It is the third biggest RE market in the world and signatory to Paris climate accord. Power demand is increasing at a healthy 5% per annum against a decline in their home markets. Project allocation process is transparent. But unfortunately, the attractions are offset by countless operating and regulatory environment challenges – cumbersome land acquisition, lack of transmission infrastructure, GST and safeguard duty related uncertainty, poor payment record of DISCOMs etc. Tender cancellations are unnerving. Most importantly, despite their lower cost of capital, the strategic investors are unable to compete with more adventurous Indian developers, who often make speculative and aggressive assumptions when bidding. That means it is almost impossible to earn target risk-adjusted returns.
In conclusion, the high-risk market environment is putting off strategic investors. They are pacing cautiously and prudently managing their risk. It helps that the financial investors – pension funds, sovereign wealth funds and PE funds – are willing to pay a handsome premium for (quality) RE assets. For India, their waning interest is a huge loss. It badly needs their patient capital, robust quality approach and superior technology.