Isra-Mart srl : Suzlon inks Indian wind energy mega-deal

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Isra-Mart SRL news:

India's Suzlon Energy has received an order worth $1.28bn (£806m) to supply 1,000MW of wind turbines to the UK's Caparo Energy, the firm said in a statement late on Friday.

Caparo Energy, an independent power producer, plans to commission 500MW of turbines by March 2012, and another 500MW by March 2013, all in India.

The price of the turbines for the first 500MW order is fixed, while the next 500MW will have an index-based price so that any price rises can be absorbed.

The projects will be located in Maharashtra, Karnataka, Tamil Nadu, Rajasthan and Gujarat, and are expected to have generation capacities ranging from 50MW to 100MW each.

Suzlon will supply a number of wind turbine models such as the S88 and the new S9X series 2.1 MW turbines.

Tulsi Tanti, chairman of Suzlon Group, said the deal was a sign the Indian wind market was expanding fast. "With large players like Caparo entering the market, we are seeing large independent wind power producers in India becoming a major force," he said.

Caparo Energy has its registered office in the Channel Islands and was listed on London's junior Alternative Investment Market in October 2010, although its main focus remains developing wind power projects in India.

The firm plans to have a portfolio of 5GW of wind power projects in India by 2017, including 3GW of capacity from Suzlon agreed in a preliminary deal last year.

Caparo secured a 4.5bn rupees (£62m) loan to partially finance those plans, and said on Friday it plans to raise further funds through loans or a share sale.

The timing of the deal is vital to Suzlon, which is saddled with almost 215bn rupees of debt and is seeking to ramp up orders before a two-year grace period on principal repayments ends next year.

In 2009, Suzlon sold a 35 per cent stake in Belgian wind gearbox maker Hansen Transmissions International for $370m in a move to cut debt.

And earlier this month Tanti and family members were forced to deny reports that they were considering selling their stake to Spain's Gamesa to finance debt.

Suzlon projects now generate 15GW of wind energy capacity in 25 countries worldwide, and the group's order book stood at 3.8GW at the end of last year.