The tie-up between French energy giant Engie and Dubai-based private equity firm Abraaj Group to build 1,000 MW of wind energy projects in India, announced last September, has fallen through.
The end of the alliance follows internal problems at Abraaj, the world’s largest private equity firm dedicated to developing economies. Abraaj manages funds worth $13.6 billion from 24 marquee investors, including the World Bank and the Bill and Melinda Gates Foundation.
In early February, some investors accused Abraaj of misusing part of the funds entrusted to it. In particular, they questioned why $200 million – part of a $1 billion healthcare fund started in late-2016 to build hospitals in less-developed countries – had not been used. While Abraaj denied any wrongdoing, citing a review by KPMG, founder Arif Naqvi gave up control of the fund management business late last month.
Due to this controversy, Abraaj was finding it difficult to raise fresh funds and had thus been forced to call off its India-specific alliance with Engie.
Since September, when the partnership was announced, Engie has won two wind projects – 30 MW at the auction held by Gujarat Urja Vikas Nigam Ltd (GUVNL) in December and 50 MW at the one held by Solar Corporation of India (SECI) in February – on its own steam. These mark Engie’s first forays into wind energy in India.
But Abraaj is helping Engie in its efforts to find a new partner.
Engie is involved in the electric vehicles space in several countries but has refrained from entering it as yet in India. “For success in electric vehicles, India needs to create the same kind of conditions that it has done for renewable energy. “There needs to be a regulatory framework and some agency – like SECI in renewables– to coordinate things at the federal level.”as per Engie CEO Isabelle Kocher.