Kiran Energy- Solar Developer raises about $30mn in Private Equity200MW capacity in three years

POSTED BY PANCHABHUTHA JANUARY 25, 2011 11 COMMENTS FILED UNDER ALAN ROSLING, ARDESHIR CONTRACTOR, ARGONAUT VENTURES, BESSEMER VENTURES, KIRAN ENERGY, NEW SILK ROUTE,VCCIRCLE

According to this report, Kiran Energya Mumbai-based solar power company founded by Ardeshir Contractor, formerly head of KPMGs Investment Banking business in India, and Alan Rosling, a former Executive Director of Tata Sonsis said to have received a funding of about $30 million from three prominent private equity players New Silk Route, Bessemer Ventures and Argonaut Ventures for a majority stake. According to the report, when contacted, Alan Rosling, founder and Chairman of Kiran Enery, confirmed the fundraise but declined to divulge the amount raised. We have completed our series A funding with New Silk Route, Bessemer Ventures and Argonaut Ventures. Now we have sufficient equity holding for the first round of expansion, Rosling told VCCircle.

These three players together hold majority stake in the company, he said.

According to sources, the three players have invested equally in the company and jointly hold 75-80% stake. But, neither Rosling nor any of the three PE players, VCCircle contacted, elaborated on the investment size and stakeholding.

The company has already signed two power purchases agreements, a 20 MW PPA with Gujarat Urja Vikas Nigam Ltd (GUVNL), a state-run power generation, distribution and transmission company, and a 5 MW PPA under National Solar Mission project, Rosling said.

We have signed our first joint venture with Mahindra & Mahindra to generate 5MW solar power, he said.

The company is in advanced stages of talks with different distributors to sign PPAs and for JVs. It plans to achieve 200 MW capacity in three years, Rosling said. As Panchabuta has earlier mentioned, the Solar PV space in India is getting very interesting. 37 developers have been shortlisted in the first phase of National Solar Mission for a total capacity of 620 MW. Also as Panchabuta had reported earlier this month all of the shortlisted developers

have signed their PPAs and this leaves us at an interesting stage where the projects need to achieve financial closure and complete execution within stipulated timelines. Apart from this the Indian state of Gujarat that has been in the forefront of Solar energy development has released a state specific solar policy.Gujarat government has set the ambitious target of installing 1,000 Mw solar power capacity by the end of 2012 and 3,000 Mw in next five years. In this regard, the state has already signed PPAs for about 934MW. As Panchabuta understands, Kiran Energy has signed PPAs for about 25MW and have a 5MW JV with Mahindra & Mahindra. The second batch of the first phase of the National Solar Mission is likely to come up for bidding in the next few months and apart from that there is likely to be some policy announcements from other states like Tamil Nadu.

Given this, 200MW capacity in the next three years seems like a rather ambitious target that has been set by Kiran Energy. However, given that they have already raised private equity and hence access to better funding sources could help them tie up with a lot of other projects that have to achieve financial closure. As Panchabuta has earlier mentioned, equity fund raising is currently being undertaken by some of the initial project developers with signed PPAs at very attractive tariffs for huge premiums and this could also be an opportunity for Kiran Energy. It will also be interesting to see if Kiran Energy decides to go the Independent Power Project developer route and use the REC market approach that is once again is being explored by a number of developers.