Solar plant acquisition

A clear-eyed look at where they stood.

The buyer had a term sheet for a ₹75 Cr renewable-energy asset and a deadline to respond. What they did not have was a clean view of what they were actually buying. A solar plant’s value sits in cash flows that stretch fifteen to twenty-five years out, so a headline asset price says almost nothing about whether the deal works at that price.

Three questions sat underneath the transaction. Would the power purchase agreement hold up, on tariff, tenure, and counterparty risk, for the life of the asset. Were the statutory approvals the plant was operating under complete and transferable, or would the buyer inherit a compliance gap. And what did the land title and site risk actually look like, since a generation asset is only worth as much as its right to sit on that land and stay connected. None of these questions had a confident answer going in.

A wrong call in either direction was costly. Overpay, or underweight a real risk, and the buyer carries it for the asset’s operating life. Walk away from a sound asset on an unverified worry, and they lose a ₹75 Cr opportunity to a less cautious bidder. The brief was to replace both risks with a single number the buyer could actually negotiate against.

We built a discounted cash flow model of the plant as the spine of the exercise. Every other finding had to run through it, because a risk that does not move the valuation is a footnote, not a deal term.

The PPA came first. We read it clause by clause for tariff structure, escalation, tenure, and what happens if the offtaker’s creditworthiness weakens over the contract term, since a solar asset’s entire cash flow rests on one counterparty honouring one contract for decades.

In parallel we worked through the statutory approvals the plant held, checking what was in place, what carried conditions, and what would need to be re-filed or re-assigned on a change of ownership. An approval that looks complete on paper can still create a post-acquisition compliance problem if a condition attached to the original owner does not travel with the sale.

We then assessed land and site risk: title, tenure of the land the plant sits on, and the physical and contractual dependencies that keep it connected and generating. A generation asset that cannot prove clean title to its own site is not fully de-risked no matter how strong its PPA looks.

Every finding from the PPA, approvals, and land review fed back into the DCF as an adjustment, either to the cash flow assumptions or to the discount rate applied against that risk. We also ran downside scenarios, tariff shortfall, delayed approval renewal, land dispute, so the buyer could see a central valuation alongside how it moved under stress.

The outcome

The output was a single decision-grade feasibility report: one valuation range, with the PPA, statutory, and land risk each priced into it rather than left as separate caveats. The buyer went into negotiation with a number they could defend, not a term sheet they had to take on faith.

This was a feasibility and valuation exercise, not an approval process, so there was no authority sign-off to report. The value was in converting an uncertain ₹75 Cr opportunity into a position the buyer could negotiate from with confidence.

What made it work

The discipline was refusing to treat legal, regulatory, and land diligence as separate workstreams that get stapled to a valuation at the end. Each one was built to feed the DCF directly, so the final number already had the plant’s real risks priced in rather than listed as an appendix the buyer had to weigh themselves.

For any acquirer evaluating a renewable asset, this is the difference between a valuation and a decision: a number is only as trustworthy as the diligence that sits underneath it.