ReNew Buys Ostro in One of the Largest Renewable Acquisition Deals in India

After this acquisition, ReNew Power has become the largest renewable energy project developer in India across the wind and solar energy sectors combined


Indian renewable energy project developer ReNew Power has announced the acquisition of Ostro Energy Private Limited. The acquisition is valued close to ₹10,600 crores (~$1.63 billion), according to Mercom’s channel checks.

ReNew Power currently has green energy assets of more than 4.5 GW, which include a commissioned capacity of approximately 2.8 GW.

Ostro Energy has a total capacity of more than 1.1 GW, out of which nearly 850 MW is already commissioned. Ostro Energy’s assets are spread across the states of Andhra Pradesh, Karnataka, Telangana, Rajasthan, Madhya Pradesh, and Gujarat.

With the acquisition of these assets, ReNew Power’s capacity will now exceed 5.6 GW, the company said in its media statement. Over 65 percent of the combined portfolio capacity of ReNew and Ostro is already operational.

In January 2018, ReNew Power raised ₹22.35 billion (~$352 million) to be used for its expansion and loan-payment plans. ReNew raised the amount through Non-Convertible Debentures (NCD).

According to Mercom’s India Solar Project Tracker, ReNew Power was ranked as the fifth largest solar project developer with installed capacity of 1,149 MW at the end of 2017.  ReNew is also the largest wind power developer in the country.

In the acquisition, ReNew Power also acquired wind assets aggregating 990 MW. After this acquisition, ReNew Power has become the largest renewable energy project developer in India across the wind and solar energy sectors combined.

Concurrent with this transaction, Canada Pension Plan Investment Board (CPPIB) is investing an additional $247 million to support ReNew Power’s financing for this acquisition. As reported previously by Mercom, the CPPIB recently acquired a 6.3 percent stake in Indian renewable energy project developer ReNew Power from the Asian Development Bank (ADB) for $144 million. CPPIB first revealed its plans to acquire ADB’s equity stake in ReNew Power in November. ADB first purchased its stake in Renew Power by making a $50 million (~₹3.4 billion) equity investment in the company in 2014.

In November 2016, Mercom reported on another big acquisition of the domestic solar sector. Greenko Energy Holdings (Greenko) completed the acquisition of SunEdison’s 587 MW Indian wind and solar projects for a cash payment of $42 million and assumption of project-level debt of $350 million (at an average interest rate of 11.3 percent). The enterprise value of the transaction was approximately $392 million.

In September 2016, Tata Power Renewable Energy acquired 100 percent shareholding in Welspun Renewables Energy (WREPL) and its subsidiaries for $1.4 billion (~Rs.93.8 billion) which was one of the largest acquisition in the Indian renewable energy sector at that time, but this acquisition by ReNew is valued at ~$1.6 billion. This is the largest transaction in terms of the enterprise value in the Indian renewable energy sector.