Japan’s Mitsui & Co. and Osaka Gas have placed non-binding bids to buy a 30% stake in ReNew Energy Global Plc’s 2.3 gigawatts (GW) commercial and industrial project portfolio, two people aware of the development said.
The equity value of the transaction is pegged at about $300 million, and is part of ReNew Energy Global’s capital recycling strategy. The sale process is being managed by Moelis & Co. The company, one of India’s largest clean energy firms, plans a capital expenditure of ₹35,000 crore and recently raised $400 million by selling senior-secured green bonds.
Last year, Mitsui acquired a 49% stake in ReNew Energy’s 1.3GW renewable energy project and 100MWh battery storage farm. The Japanese company has operations in 63 countries, spanning energy, infrastructure, and chemical businesses. Osaka Gas is one of Japan’s largest natural gas importers and operates businesses in electricity generation and distribution.
Japanese firms are increasingly showing interest in India’s infrastructure sector, given the close relationship between the two nations. In 2017, JERA Co. Inc., a joint venture between Tokyo Electric Power and Chubu Electric Power, acquired a 10% stake in ReNew Energy Global. Canada’s CPPIB became the majority owner of ReNew in March this year, holding 51.6%, with JERA, Abu Dhabi Investment Authority, and Global Environment Fund being the other key stakeholders.
“Mitsui and Osaka Gas have submitted non binding offers (NBOs). More NBOs are expected,” one of the two people cited above said, requesting anonymity.
Investor interest in India’s C&I segment is strong due to the availability of open access, which enables large power users to buy power from the open market instead of relying on the more costly grid. Additionally, this space protects projects from risks such as power procurement curtailment by state-run power distribution companies (discoms).
Mint reported earlier that as part of its capital recycling strategy, ReNew has been exploring several opportunities.
These include talks with Petronas to set up green energy projects in India, in which the Malaysian company may buy around 49% stake at the project level, and a potential sale of clean power projects worth 1.1GW to Torrent Power for approximately $450 million in equity value.
Spokespeople for ReNew Energy Global and Moelis & Co. declined to comment. Queries emailed to spokespeople for Mitsui and Osaka Gas on Thursday remained unanswered.
Backed by India’s annual power growth of around 10% annually, the country’s green energy space is witnessing several deals in play. “We believe renewable generators’ medium-term growth prospects remain robust, underpinned by the government’s goal of having half of the country’s installed electricity generation capacity coming from non-fossil fuels by 2030,” Fitch Ratings wrote in a 1 May report.
The report added that solar and wind energy firms in India could benefit from heatwaves, spikes in electricity demand, pressure on coal inventories, and the impact of El Nino on hydropower generation.
“These dynamics may be credit positive for Fitch-rated renewable energy firms that are able to sell extra production on power exchanges at higher prices because of the demand-supply gap, and also for firms with electricity storage operations, as higher power demand volatility should increase the importance of storage. Fitch also believes that strong electricity demand should reduce curtailment risk,” the Fitch Ratings report said.
ReNew Energy Global, formed by the merger of ReNew Power and RMG Acquisition Corp. II in August 2021 as part of its IPO, has a portfolio of 13.4GW and a commissioned capacity of 7.7GW.
The company has partnered with various organizations, including Norfund, KLP, Elsewedy Electric, AES, Fluence, Indian Oil Corp. Ltd, and Larsen & Toubro, as part of its growth strategy.
