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As coal turns dirty, Indian companies strike gold

When Hollywood actor Leonardo DiCaprio talked of climate change while accepting Oscar award from the Academy of Motion Picture Arts and Sciences, Indian industrialists could well be sniffing a business opportunity, listening to him.

DiCaprio is one among hundreds of global super-rich -- individuals, families, trusts or organisations like Norway's pension fund -- who have pledged for a fossil fuel free-world to be achieved partly by exiting ivestments in coal-fired power plants or shares in companies like Coal India or Adani.

Another member to join this this informal group is Engie Group of France, which sold off its 89% stake in 1,000 megawatt (mw) Meenakshi Energy plant at Nellore, Andhra Pradesh, last Thursday, in line with the pledge reaffirmed by the Hollywood star on Monday.

India Power Corporation, owned by the Kanorias of Srei, picked up that stake for an undisclosed sum adding to its portfolio of 462 mw of coal fired power asset.

Engie, in a similar deal, has also simultaneously exited its 40.5% stake in a large 2,000 mw thermal power plant at Indonesia by selling it off to a local business family.

"By reducing Engie's installed coal-fired generation capacity by 16%, this transaction marks an important step in the reduction of its worldwide CO2 emissions," the French company, which aims to be the leader of this world energy transition, said.

This global trend, through currently restricted to individuals, families and institutions in Europe and US, is growing.

According to a study by Arabella Advisors, till September, 436 institutions and 2,040 individuals across 43 countries and representing $2.6 trillion in assets have committed to divest from fossil fuel companies.

This resulted in three exits in India, 1,723 in the US and 63 in the UK.

"Commitments from several large pension funds have contributed significantly to the growth in total assets of divesting institutions, including the Norway Pension Fund, the California Public Employees' Retirement System, and Sweden's AP2 Pension, along with other pension funds in the US, Australia, Norway, and Denmark," the Arabella report had said.

A year back Norwegian Pension Fund, world's largest sovereign wealth fund, has sold off most of its holdings of Indian coal and power stocks like Coal India, Adani, GVK, NTPC, CESC, among others.

"With the disposals in the US, India and Indonesia, we already realise over one-third of our three-year €15 billion portfolio rotation programme, while reducing by 20% our coal-fired generation installed capacity," Engie said while striking the deal with the Srei-owned company.

Source: DNAIndia