‘We have a large commitment of $450 mn towards Sprng Energy’

India’s largest clean energy deal, ReNew Power Ventures last week acquired Ostro Energy Pvt. Ltd from global private equity fund Actis LLP at an enterprise value of $1.5 billion. In an interview, Actis partner Sanjiv Aggarwal, responsible for its Asia energy business, spoke about the firm’s prudent green energy auction strategy and a larger game plan for its second green energy platform— Sprng Energy Pvt. Ltd—by growing its 750 megawatt (MW) portfolio to 1.75 gigawatt (GW).

Aggarwal also spoke about leveraging Sprng Energy that bid ₹2.51 per kilowatt hour (kWh) last week to win wind power contracts for 300MW, to make investments in South East Asian countries. Edited excerpts:

Are Indian clean energy auctions nervewracking?

We have got used to it. The first bid that I attended, I was all excited and nervy but after doing so many of these, you realize in the initial few hours which way it will go…Before we start the bid, we have a very clear-cut walk-away position. We are very disciplined investors; we don’t get swayed. We wait…So, in the previous bid, SECI (Solar Energy Corporation of India)—3 bid, the bids stopped because we backed out.

Are you setting up prudence benchmarks?

No, I wouldn’t say that. In our business, prudency is something that is discovered down the road. Everyone needs to decide for himself. So, we have been determining our walk-away price.

What is your game plan for Sprng Energy?

We have a large commitment of $450 million towards Sprng and have a lot of runway still left. We have investment commitment of around $200 million (for 750 MW portfolio)…Actis will look for acquisitions for Sprng. We will grow Sprng the way we grew Ostro. We now have a decent management team; it has not been completely fleshed out. We have a great CEO running that business for us. We have around 35-40 people and are in the process of recruiting more. So, the team will grow, the portfolio will grow and just like we set up Ostro, we will set up Sprng. The business plan for Sprng is larger. We would take it up to 1.5-1.75GW.

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Will you leverage Sprng Energy in making investments in the region?

In Sprng, we are thinking of doing a South-East Asia piece. The reason is, when you go to South-East Asia, it is a very small and fragmented market…What we are thinking is that since we already have the capability within Sprng, we can use that to grow our business in South-East Asia… The Philippines, Indonesia, Malaysia, Vietnam and Thailand.