London-based solar giant Lightsource Renewable Energy has secured a major, multi-billion pound deal to install around 3GW of solar in India.
The deal has been announced as part of a £10 billion tranche of trade deals signed during Indian prime minister Narendra Modi’s visit to the UK, which kicked off yesterday.
Lightsource will invest £2 billion to install and manage around 3GW of utility-scale solar farms in the country over the next five years, and the deal is expected to create an expected 600 jobs – 300 in India and a further 300 in the UK – and £42 million revenue within the UK.
Lightsource will partner with Srei Infrastructure Finance, an infrastructure finance firm which specialises in development and advisory functions in the country, for the projects.
Nick Boyle, chief executive at Lightsource, said India would be a “key market” for the company in the future. “We are excited to be working with Srei, our first partner, who will be helping us towards achieving our solar PV deployment goals in India,” he said.
Commenting on the deal, trade and investment minister Lord Maude said: "The UK and India have a strong, successful trade relationship. Prime Minister Modi’s visit to the UK this week demonstrates our commitment and ambition to collaborate further.”
“Both countries have a wealth of talent and expertise to share and I am pleased to see so many UK and Indian companies announcing deals this week. By working in partnership we can deliver real benefits and job creation for both of our economies,” Maude added.
The deals follow a string of recent market activity from Lightsource. In recent weeks the developer has refinanced a substantial amount of its portfolio, first raising £400 million through financing partner Octopus and then last week securing a further £284 million from M&G Investments and AMP Capital.
Lightsource has held a long-standing interest in India. In June Solar Power Portal reported that India was in Lightsource’s crosshairs with the developer looking to export its development expertise into new and emerging markets.
India represents a huge boon for the international solar industry given targets set by Modi's government to install up to 100GW of solar in just seven years. Development contracts are being secured in the country, perhaps the most notable of which a is 500MW tender secured by SunEdison in Andhra Pradesh at a record low price of INR4.63/kWh (0.046 pence).
Lightsource will however not be the first British developer to enter the Indian market. British Solar Renewables has established offices in India and Pakistan, and Giles Frampton, business development director at British Solar Renewables, said Modi’s election had given developers and investors greater confidence in the country.
“Prime minister Modi’s visionary work on renewables as a state governor and now as PM is to be applauded. We are now able to export British goods and knowhow that have been developed in the turbulent UK market,” Frampton said, adding that it was a “great shame” the UK government had turned its back on solar given the “huge contribution” it could make to the country’s energy market.
Many other UK-based developers are strongly expected to diversify into new markets as the domestic market contracts owing to regulatory changes and investment uncertainty. Hive Energy has opened offices in Dubai and Turkey in recent weeks, while Lightsource has already outlined a £500 million investment in the Irish market.