ReNew Power Acquires 103 MW of Wind Projects for over $155 Million

December 13, 2017


Indian renewable energy project developer ReNew Power has acquired a 100 percent stake in KCT Renewable Energy Private Limited (KCTREPL) from the Karm Chand Thapar (KCT) Group for over ₹10 billion (~$155 million). Under the deal, ReNew Power will take ownership of KCTREPL’s three fully-operational wind power projects that generate a combined 103 MW in Andhra Pradesh.

The acquisition boosts ReNew Power’s operational wind power generation capacity above 1,300 MW. KTC Group was advised by HSA Advocates in the sale.

A ReNew Power executive confirmed the acquisition and said it was an important step. Prior to this acquisition, the executive said ReNew Power only had two operational wind projects in Andhra Pradesh, both in Elutalla. Now the company’s operational capacity in the state is close to 200 MW of wind.

The executive added that the acquisition demonstrates the diversification of the company’s growth plan. “Earlier we were focused primarily on organic growth, but now there has been a shift to project acquisition,” he said. When asked whether the current cash inflow from various financial institutions was behind that shift, the executive said, “Yes, of late we have been lucky to get huge investments, these have also helped.”

The executive called the acquisition a great buy as the projects have signed, 25-year power purchase agreements (PPAs) and their tariff of (₹4.80/~$0.075/kWh) is a rupee and few paise more than India’s newly discovered wind tariffs of  ₹3.46 (~$0.051)/kWh.

Regarding the recent influx of investments into ReNew Power, Mercom reported in November 2017 that the Canada Pension Plan Investment Board had invested approximately $200 million (~₹12.9 billion) into ReNew Power Ventures in the form of compulsory convertible preference shares (convertible debt) that are set to convert into equity shares at the time of an initial public offering.

In February of this year, the company also received a $200 million (~₹12.9 billion) investment from JERA, a joint venture of the large Japanese utilities Tokyo Electric Power and Chubu Electric Power. In exchange for the investment, JREA gained a 10 percent stake in the company.

These investments have infused copious funds and enabled ReNew Power to fuel the shift in its growth plans. In February of this year, the company raised another $475 million (~₹30.6 billion) through its subsidiary Neerg Energy through the sale of green bonds to overseas investors as the company sought to refinance debt from 13 green projects.

The investor base of ReNew Power includes Goldman Sachs, the Asian Development Bank, JERA, Abu Dhabi Investment Authority, the Global Environment Fund, and others.

ReNew Power is not the only renewable energy developer to attract large investments in the past year. Mercom reported in August that Sembcorp Industries, through its wholly-owned subsidiary Sembcorp Utilities, had entered into an agreement to acquire the remaining 28 percent stake in wind and solar project developer Sembcorp Green Infra (SGI) from IDFC Private Equity Fund III for ₹14.1 billion (~$220.2 million). Upon closure of the deal, Sembcorp Utilities was set to become the sole owner of SGI.

Image credit: KCTREPL