Renew to sell 1GW assets at $1 billion enterprise value
The projects on offer include operational wind and solar energy plants
Renew Energy Global Plc is looking to sell 1 gigawatt of its operational clean energy capacity at an enterprise value of around $1 billion as part of the company’s capital recycling strategy, two people aware of the development said.
The assets on offer include solar and wind assets and have an equity value of around $300 million, the people said, requesting anonymity. Renew plans to sell existing assets and reinvest the proceeds in building new clean energy assets.
Renew has a 13.4GW portfolio with a commissioned capacity of 7.7GW.
“If the value offered is good, capital recycling strategy is part of the plans for Renew,” one of the two people cited above said.
Renew is open to selling a minority stake at the project level or going for an asset sale if the valuation is good, the second person said.
Renew recently partnered
with Norway’s state-owned investment fund Norfund, and KLP, the country’s largest pension firm, to co-invest in transmission projects. Also, Japan’s Mitsui and Co. Ltd acquired a 49% stake in a round-the-clock 1.3GW renewable energy project and 100MWH battery storage farm. Renew Energy Global’s subsidiary, Renew Power Pvt. Ltd, has partnered with Elsewedy Electric S.A.E. to set up a green hydrogen plant in the Suez Canal Economic Zone at an investment of $8 billion. Renew, founded by Sumant Sinha, has also joined hands
with AES and Siemens-backed Fluence to form an equal JV for the energy storage business in India. In addition, Renew has also partnered with Indian Oil Corp. Ltd and Larsen and Toubro Ltd to form a tripartite venture for the green hydrogen sector in India.
In an emailed response to a query, a Renew Energy spokesperson said, “This is to inform you that we do not want to comment on market speculations.”
Renew Energy’s loss narrowed to ₹98.6 crore ($12 million) in the September quarter from ₹661.4 crore a year ago on
higher revenues, the company said in an earlier statement. Total income rose 5.1% to ₹2,240.9 crore over Q2. Renew Power Pvt. Ltd is among the earliest entrants in India’s green economy and, in August last year, merged with Nasdaq-listed special purpose acquisition firm RMG Acquisition Corp. II (RMG II), to form a new entity, Renew Energy Global.
India has an installed renewable energy capacity of 163GW, with green energy projects drawing foreign direct investment of $78 billion. India is working on an ambitious plan to meet its commitment to netzero carbon emissions by 2070, increasing non-fossil energy capacity to 500GW by 2030 and reducing the carbon intensity of its economy by 45% from the 2005 level.
The domestic green energy deal space has been active with several transactions in play. As reported by Mint earlier, global oil major BP Plc, Norway’s staterun electricity firm Statkraft, and New York-based I Squared Capital are in the fray to buy Continuum Green Energy (India) Pvt. Ltd, and Singapore’s Sembcorp Industries Ltd’s subsidiary Sembcorp Green Infra Ltd (SGIL), have signed an agreement with US private equity firm Global Infrastructure Partners (GIP) to acquire its clean energy platform, Vector Green Energy. Also, private equity firm TPG is looking to sell its stake in renewable energy company Fourth Partner Energy Pvt. Ltd.
The investor interest comes against the backdrop of the government’s focus on the unfolding energy transition—the largest such play globally. Prime Minister Narendra Modi, at the G20 summit in Indonesia, said by 2030, 50% of India’s electricity would be generated from renewable sources.