National Investment and Infrastructure Fund (NIIF) has emerged as the frontrunner to acquire Sprng Energy from Shell in a deal valued at around $1.7 billion, according to sources familiar with the development.

NIIF is currently in discussions with Temasek to form a consortium ahead of binding bids, which are expected shortly. The transaction has attracted strong interest from global and domestic investors, with other contenders including Actis, Aditya Birla Group, and KKR.

Sprng Energy has built a renewable energy portfolio of approximately 5 GW, of which around 2 GW is currently operational. The platform represents a significant asset in India’s rapidly expanding clean energy market, with a mix of solar and wind projects across key states.

Shell had acquired Sprng Energy in 2022 for about $1.55 billion as part of its broader strategy to expand its presence in renewable energy. However, the current divestment reflects a strategic recalibration, as global energy majors reassess capital allocation amid evolving market dynamics.

The deal is expected to be concluded at a valuation lower than the initially targeted $2 billion, primarily due to cost overruns and risks associated with power purchase agreements (PPAs). These factors have influenced investor sentiment and pricing expectations in the competitive bidding process.

Barclays is advising on the transaction, which has been under evaluation since October. The acquisition, if completed, would mark a significant re-entry for NIIF into the renewable energy sector and reinforce its role in financing large-scale infrastructure and clean energy assets in India.

The outcome of the deal will be closely watched, as it highlights the evolving dynamics of renewable energy investments, including increased consolidation, strategic exits by global players, and growing participation by sovereign and institutional investors in India’s clean energy transition.