Private equity fund Actis Llp is in talks with ReNew Power, India’s largest independent renewable energy producer, to acquire more than half a gigawatt of green energy projects for an enterprise value of around ₹3,000 crore, said two people aware of the development.
This potential sale of 550 megawatt (MW) capacity would be the largest such deal in India’s clean energy space after the covid-19 outbreak.
These comprise a 300MW solar project at Pavagada Solar Park in Tumkur district of Karnataka and a 250MW wind farm in Gujarat.
“Actis is in talks with ReNew Power for acquiring around 550MW of clean energy capacity,” said one of the two people cited above requesting anonymity.
A ReNew Power spokesperson in an emailed response said, “We have no comments to offer on your query.”
Queries emailed to a spokesperson for Actis on Monday evening remained unanswered.
Interestingly, the Gujarat project located in Kutch district was won by Ostro Kutch Wind Pvt. Ltd in April 2017. Post the 2018 acquisition of Actis-owned Ostro Energy by ReNew Power for an enterprise value of around $1.5 billion, the Kutch project became part of ReNew Power’s portfolio, which is backed by Goldman Sachs and Canada Pension Plan Investment Board (CPPIB). The talks with ReNew Power come against the backdrop of Actis Long Life Infrastructure Fund (ALLIF) recently acquiring two solar projects totalling 400MW from Acme Solar Holdings Ltd.
ReNew Power is looking to raise funds through asset sales, after putting on hold a plan for an IPO. The company is also gearing up to raise offshore debt by issuing dollar bonds, as it looks to refinance domestic debt of certain operating assets. Actis created Ostro Energy in 2014, whose projects are spread across Andhra Pradesh, Karnataka, Telangana, Rajasthan, Madhya Pradesh and Gujarat. Actis’ renewable energy platform—Sprng Energy—has a 1.65GW portfolio, of which 1.45GW is under various stages of construction. Actis plans to grow Sprng Energy to 2GW capacity.
With investors such as Japan’s JERA Co. Inc., Abu Dhabi Investment Authority (ADIA) and GEF SACEF India, ReNew Power generates 5.4GW of energy through solar and wind assets and has another 4.6GW under various stages of development. It also plans to set up a 2GW cell and module manufacturing facility in India and recently terminated a power purchase agreement (PPA) signed with the Solar Energy Corporation of India (SECI) for a 265MW wind project in Tamil Nadu.
The proposed deal also comes against the backdrop of debt financing for green energy projects drying up with large domestic banks hesitant to finance projects that have committed to sell power at less than ₹3 per unit as they suspect the viability of such projects.