(Bloomberg) -- Chinese state-backed investment fund CNIC Corp. is considering buying about a 10% stake in Greenko Group, one of India's largest renewable energy companies, according to people familiar with the matter.
Greenko, whose backers include Singapore sovereign fund GIC Pte and the Abu Dhabi Investment Authority, has been seeking to raise around $800 million by introducing a long-term investor, said one of the people. The Indian company is planning to use the fresh funds to expand its energy storage capacity in the country during peak hours, in competition with coal-based power plants, the person said.
The terms for a deal haven't been finalized and the talks may not lead to a transaction, according to the people, asking not to be identified as the matter is private. Other bidders could emerge, they said.
A representative for Greenko Group declined to comment, while a representative for CNIC didn't respond to requests for comment.
Greenko was founded in 2004, and has 4.8 gigawatts of installed capacity in solar, wind, hydro, biomass and gas-based power generation across 13 states in India, according to its 2018-2019 annual report. GIC and ADIA have invested around $2.2 billion in total in Greenko, according to a report by Care Ratings.
The Indian government set a target in 2015 to install 175 gigawatts of renewables capacity by 2022. The country faces hurdles to commissioning new projects, including delays signing power off-take agreements, new policy barriers, land acquisition hurdles and transmission constraints, according to a BloombergNEF report in September.
CNIC was jointly established by the State Administration of Foreign Exchange and State-owned Assets Supervision and Administration Commission of the State Council in 2012, according to its website. The fund, incorporated in Hong Kong, had total assets of $33 billion and 150 billion yuan under management as of 2017.
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