IndiaIndia’s historic rise in renewable energy M&A deals in 2020 has emerged as a bright spot during the coronavirus pandemic. But lawyers are not surprised by the growth, which they say is supported by a range of factors. 


Lawyers working in the renew-able energy sector in India have been busy. Despite a global pandemic, India’s renewable energy market has continued to grow, underpinned by government support and a global emphasis on sustainability.

In 2020, M&A transactions in the country of around $2 billion saw a 75 per cent jump from transaction volumes estimated at $1.2 billion in 2019, according to KPMG. India also is now the world’s third-largest electricity producer, just surpassing Japan and Russia, and demand is only expected to grow, according to a report from PwC.

Lawyers say a raft of factors have contributed to the recent market trend.

Dibyanshu Sinha, a partner at Khaitan & Co., describes India’s power sector in recent years as having experienced a “major shift” to non-conventional sources, largely driven by the government. “The recent years have seen a policy drive in order to boost investment in the energy sector such as its objective to reach a renewable energy capacity of 500 GW by 2030, battery storage and promoting domestic production of oil,” Sinha says.

India’s 2020-21 budget revealed an allocation of 220 billion rupees ($3 billion) to the power and renewable energy sector, and due to India’s growing demand, the energy mix has been broadened to include variable renewable energy sources alongside conventional sources, Sinha notes.

Deepak Kumar Thakur, projects, energy and infrastructure partner at L&L Partners, agrees that governments at the national and state level have supported this recent trend, relaxing regulatory and compliance norms for green energy projects that make the process and implementation of power-generating plants an attractive prospect.

Thakur describes India’s strides towards upscaling renewable energy as “commendable.”

“As the global demand for green and clean energy profile becomes more desirable, India’s poignant growth in upscaling the renewable energy market has attracted attention from all over the world,” Thakur notes.

Jay Parikh, another partner at L&L Partners, agrees that carbon neutrality and energy transition are dramatically transforming the energy market.

“Recent government incentives and commitments – such as the European Green Deal, which is put in place to make the European Union’s economy sustainable by turning climate and environmental challenges into opportunities, and making the transition just and inclusive for all; and the Paris Climate Agreement, which is a legally binding international treaty on climate change – and shareholder pressure have encouraged global players to make major efforts to reduce emissions in terms of sustainability,” Parikh notes.

For lawyers in the market, this has meant an increase in work, even as the pandemic leaves its mark on other industries.

“With respect to the energy sector, a lawyer’s role is even more important as she/he must also be well equipped with a good business and commercial under-standing of the energy industry apart from being well-versed with M&A laws,” Parikh explains, noting that “under-taking a thorough diligence” also takes up a large part of the role.

Of course, there’s also a vast array of compliance checks required, Thakur says, “for setting up of new power plants as well as the compliance checks for operational power plants, legal opinions and diligence reports form an operative part of the decision making process to finalise investment plans in the energy sector, especially in the brittle market conditions of today.”


The energy sector has been resilient during the pandemic, but it was unable to fully escape the impact. Thakur recalls “slouching demand and oversupply,” particularly during the severe lockdown phase of the COVID-19 pandemic.

“Many small-scale power producers faced the issue of cash-crunch, putting themselves available on the market to be acquired by the larger and cash-rich players, as they had drought in their access to credit. One of the reasons for the rise in the M&A transactions in the energy sector could be attributed to this,” Thakur explains.

The slowing economy during the COVID-19 pandemic also resulted in a low-interest rate cycle that “has created an aura of attraction for higher bearing assets like power generating plants, for lucrative funding,” Thakur says, noting that larger industry players “with deep pockets and higher risk appetite” have been on a buying spree “with more and more anticipated investments in the energy sector, especially renewable energy.”

“While the power sector dealt with the overall aberrations of a disrupted market during the pandemic, the overall impact on the sector has not been devas-tating,” Thakur adds.

Akila Agrawal, partner and head of M&A at Cyril Amarchand Mangaldas, says dealmaking was “largely unaffected” by the pandemic. “Lawyers have worked around the challenges of the pandemic through use of technology. The documentation around such transactions, however, have undergone a change due to the change in perspectives around risk allocation,” she says.


Looking to the future, lawyers predict the traction to continue, supported by top government-backed initiatives and increased scrutiny around environmental impact.

“As green compliance, energy efficiency and environmental sustainability become core themes in the transition towards low fossil fuel economies on a global scale, India will witness more M&A deals in the transition shift,” predicts Parikh, adding the market expects the government’s continued push in policy measures will aid M&A transactions in the energy sector.

Agrawal agrees, saying the government is expected to continue to increase the share of sustainable renewable energy sources to reduce the dependency on traditional fossil-fuel-based energy sources.

“The government targets achieving a capacity of 175 GW of renewable energy by the year 2022 and a capacity of 450 GW of renewable energy by the year 2030, such that more than 40 percent of the country’s power demand is met by renewable energy. The continued government policies to attract and promote investment in the renewable energy sector will support the growth of the sector,” Agrawal notes.

Additionally, the United Nations Sustainable Development Goals and the Paris Climate accord continues to drive energy companies to be conscious of ESG issues. Agrawal feels this will spur a focus on the renewable sector, “which is ultimately key to their long-term success and value creation.”

“Clean energy assets are a value for money investment easy availability of credit with larger players in the market. Many firms, within and outside the country, are keeping a close eye on India’s energy market.”  

— Deepak Kumar Thakur, L&L Partners

Thakur notes that the recent growth in M&A transactions in the energy space has led to predictions that there will be “even more boom” in the segment in the coming years.

“Clean energy assets are a value for money investment easy availability of credit with larger players in the market. Many firms, within and outside the country, are keeping a close eye on India’s energy market. Large populations and large demand for cheap energy have always driven this industry, and the lowering of tariffs to make renewable energy more accessible would compel more innovation to make renewable energy low-cost,” he says.

At the same time, “quicker and authoritative decision making” from Central Electricity Regulatory Commission (CERC) would help to dispel ambiguities in legal disputes, Thakur notes adding this would “rein-force investor trust in the ad-hoc judicial system for securing their rights.”

“With positive push from all directions, the few red flags of the energy industry require specific attention to attain holistic advancement in the sector,” he feels. Additionally, innovation and influence of start-up culture to provide “solution-based ideas to ease the issues of operability in the energy sector is highly welcome, and it promises to provide a much-needed freshness in the sector.”

Raghubir Menon, a partner at Shardul Amarchand Mangaldas & Co, is also confident that the trend will continue with government support. “We are hoping some industry issues, in terms of safeguards and environmental issues, will start getting ironed out before the regulators and by the courts,” he says. “We don’t see any sort of a downturn in the near future.”


To contact the editorial team, please email