Pan Global Corp. (PGLO) Poised to Profit as India Doubles Down on Renewables

Pan Global, which is heavily focused on India’s burgeoning renewable energy market via their Pan Asia Infratech subsidiary, with a portfolio of developing small-hydro plants like the recently grid-connected 5.7MW Project Badyar up in the northern Himalaya region (Uttarakhand), took some time out to note the recent article in India’s top daily business publication, The Business Standard, highlighting the country’s renewable momentum.

The article looks at the fact that as of the end of March this year, India has hit just shy of 13% of their total potential installed capacity for renewable energy, or some 31.7GW, including hydro (India is the world’s fifth largest electricity generating nation at some 243GW annually). The article examines in particular data out of the Green Summit 2014 held in Bangalore early this June, including the Renewable Energy Status Report 2014 data from the leading global renewable energy policy multi-stakeholder network, REN21, and tries to characterize the government’s threading of the needle when it comes to satisfying both economic development and environmental goals.

The policy landscape in India seems quite clear ultimately, with the Ministry of New & Renewable Energy (MNRE) announcement that they plan to grow renewable energy some 41.4GW by just 2017 and it appears now from the latest data that the country is indeed on track to meet those green energy goals (if not trailing expectations slightly, making the renewables push even more bullish). This clear policy target for installed renewable capacity creates an approximately $10.51B opportunity in India through 2017 and given that at least 1.5GW of that footprint is earmarked specifically for small hydro, there is tremendous upside potential for PGLO moving forward.

Management at PGLO is going all in on this opportunity with an enhanced focus on small hydro to address how demand in the country has rapidly overtaken supply, leading to strained grid conditions and even serious, GDP-impacting blackouts like those that occurred in 2012. The optimal logistics of small hydro applications, from low environmental impact, to localized implementation securing power supply amid a strained national grid, makes this particular niche of the renewables market especially attractive longer-term. But PGLO isn’t just about hydropower, they are advancing a vibrant mix of geothermal and solar photovoltaic efforts, as well as green building and sustainable hydroponic agriculture focused on producing premium organic produce for India’s growing population (2.59 births per woman). Solar PV represents a strong secondary market for PGLO in India, given that the latest report on India’s solar sector out of A.T. Kearney indicates some $7B in capital investment slated for grid-connected solar over the next ten years. Add the fact that the 8% slice of the renewables pie represented by solar in India (according to the MNRE data) is growing steadily and you get a solid backdrop position for PGLO besides their small hydro.

Pan Global is well-positioned to capitalize on the huge untapped demand for renewable power in India and the staggered acquisition of their most recent small hydro operation, Project Badyar, via a gradual increase of equity stake in Regency Yamuna Energy Ltd. (the privately-held outfit commissioning the project), shows that the company really knows how to play the game when it comes to growing their footprint shrewdly. Quite telling when you look at the $129B in private equity/M&A deals done last year in India’s renewable sector (United Nations Environment Programme and Bloomberg), as well as the strong 25% and 3% growth respectively for private and public R&D investment between 2012 and 2013.

To learn more about Pan Global, visit www.panglobalcorp.com

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