Brookfield Renewable Sees Opportunities in Coal-Fueled India

(Bloomberg) -- Brookfield Asset Management Inc., Canada's largest alternative asset manager, will look for renewable energy opportunities in India as the country seeks to reduce its reliance on coal.

"It's looking for a way to create both domestic sources of power and reduce pollution," Sachin Shah, chief executive officer of Brookfield Renewable Partners LP, said on a conference call Wednesday. "So you've got strong government support. All of that fits in with our thesis that it could be a really great market for us to invest in over the next 50 years."

The publicly traded renewable energy arm of Brookfield has been studying the Indian market for about two years now, joining a raft of global green fuel companies such as Tesla Inc. seeking to enter. Indian Prime Minister Narendra Modi has ambitious plans to clean up the country's energy supply and improve what's among the world's worst air quality.

However, investing in India comes with its risks, and Brookfield would be cautious while expanding, Shah said. Brookfield Renewable got a footprint there by agreeing to buy TerraForm Global Inc. in March, which generates about a third of its revenue in India, according to Bloomberg data.

"It is an emerging market," Shah said. "We would be cautious and we would be careful and we would grow like you see us do in Brazil, in a modest pace."

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While China holds similar opportunities to India, Shah said Brookfield is a few years behind in that market relative to India. He's also seeing potential business in North America, in particular Mexico, after the government there took steps to free up their power market to attract foreign investors. Mexico is relatively cheap right now because it has "taken a few knocks from an investor appetite perspective" following the election of U.S. President Donald Trump.

"We're just seeing a lot of opportunities to acquire wind and solar with strong development pipelines," Shah said. "The benefits of Mexico, setting aside proximity, is the fact that many of their contractual structures are denominated in U.S. dollars so they do have a really good risk profile as a country to invest in."

To contact the reporter on this story: Scott Deveau in Toronto at sdeveau2@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Jeanette Rodrigues, Steven Frank