ReNew seeks to maintain lead in green energy, with caution
A diversified power generation portfolio and innovative financing models are helping ReNew Power, one of India’s biggest renewable energy company, hedge its sectoral risks. The company, which is targeting to hold on to 10 per cent share of the generation capacity in renewable space, is planning to expand both through acquisitions and bidding for fresh capacity.
In an interview with Business Standard, Sumant Sinha, founder chairman and chief executive officer of ReNew Power, said, “At this stage, there are many companies that are in the market and looking for buyers, and some of the larger companies with a long-term outlook are looking at acquisitions. We remain open to inorganic growth in both wind and solar, as and when the right opportunity presents itself.” He, however, did not give details on acquisition plans.
The company last month completed a 100-Mw acquisition of K C Thapar Group’s wind assets. With this, its operational wind power generation capacity reached around 1,600 Mw. ReNew has operational and under-construction capacity of 3,500 Mw in 16 states. Of this, 1,600 Mw is from wind and 1,100 is from solar projects, all commissioned.
Sinha said short-term regulatory ups and downs did not govern acquisition strategy for any company. In India, the expectation on internal rate of return from any investment has gone down by a few percentage points in the last couple of years, mainly due to the steep fall in rates. “The companies which are able to raise more capital today are the ones which have been able to deliver on their plans on a consistent basis.”
ReNew had earlier announced its intentions to go for an initial public offer, but Sinha did not disclose any timeline. “I will not be able to comment on any specific IPO plans or future fund raising plans. However, the renewable energy sector is a capital intensive sector, so any company that is looking to make bids for new projects or acquire existing assets will have to raise more capital,” he said. The company — with a total equity base of $900 million — has Goldman Sachs and USbased Global Environment Fund, Abu Dhabi Investment Authority, Asian Development Bank and JERA as investors.