Gamesa Wind Turbines Pvt. Ltd., the Indian unit of
Spain
's
Gamesa Corporacion Tecnologica SA (GCTAY), Tuesday received a $2 billion order
from the local unit of Caparo Energy Ltd. (CNE.LN) to build 2,000 megawatts of
wind power projects in the South Asian country.
The first phase of the project of about 150 MW will be commissioned by 2012 and
the final phase is expected to be completed by 2016, the companies said.
This is the biggest order in the renewable energy sector in
India
and highlights the segment's rapid growth in a country that is already the
fifth-largest wind energy market in the world.
The project will help Caparo, listed on
London
's junior
Alternative Investment Market, achieve its capacity target of 5,000 MW in
India
.
It will also strengthen Gamesa's footprint in
India
's
wind energy sector that has been dominated by local turbine maker Suzlon Energy
Ltd. (532667.BY).
India
is a key emerging market for Gamesa,
Europe
's second-largest wind
turbine manufacturer by market value after Vestas Wind Systems A/S (VWDRY). In
the first quarter, Gamesa reported an eightfold increase in sales in the Asian
country, representing 24% of its total sales.
Gamesa will supply the turbines from its manufacturing facilities in
India
.
The company has a 500 MW capacity manufacturing unit in Chennai and plans to
double its capacity to 1,000 MW by September. It is also setting up new
facilities to make parts--including blades and towers--for its 2 MW turbines in
the western state of
Gujarat
and the southern state of Tamil Nadu.
The facilities in
Gujarat
will be operational by September and the new ones in Tamil Nadu by the
first quarter of 2012.
Global wind energy majors such as Gamesa and Suzlon have turned to fast-growing
economies where rising energy requirement is fueling investments in renewables.
In
India
, high fuel prices and the nuclear crisis in
Japan
earlier this year have reignited interest in renewable energy sources.
In the traditional markets of the
U.S.
and
Western Europe
, the recovery in demand for costlier renewable energy has been very
slow after the economic downturn.
India
had wind power capacity of more than 13,000 MW as of
March 31, 2010
, according to the country's renewable energy ministry.
India
is the world's fifth-largest wind energy producer.
The Global Wind Energy Council, an industry body, expects that by 2020 the
South Asian country would have total wind power capacity of at least 46,000 MW
and up to 65,000 MW.
"This [the order] is an important relationship with a strong and committed
partner that will help us move into the next phase of our wind farm development
and roll out in India," said Ravi Kailas, chief executive of Caparo Energy
India Ltd.
Caparo's
India
Plans
In
January, Caparo's Indian unit gave a $1.28 billion contract for 1,000 MW of
wind turbines to Suzlon Energy, to be set up by March 2013.
Of this, 100.8 MW will be commissioned and connected to grid by the end of
June, and sites are being selected for 400 MW of projects, to be commissioned
by March 2012, Caparo said.
The company expects to have 500 MW of capacity by March 2012 and another 500 MW
by March 2013. It currently doesn't generate any wind power.
Caparo said also it is in "advanced discussions" to raise funds for
600 MW of projects--of both Suzlon and Gamesa--through mezzanine financing by
the end of the third quarter of this fiscal year through March.
The company's investors are more than willing to fund the orders with Suzlon
and Gamesa and it also has options including follow-on share sale to raise
funds, Caparo's
Kailas
said.
Investors in Caparo include BlackRock,
Henderson
,
Eton
Park
and
Capital International. Caparo had raised GBP50.2 million from its listing in
October 2010.